Australian state sets minimum pay for Amazon contractors
reuters.com
reuters.com
https://www.theguardian.com/australia-news/2022/feb/18/amazo...
Most importantly, they only need to pay ~$27/hr immediately.
This seems OK at first, as it is above the ~$25/hr minimum wage for casuals (note to non-Aussies: this figure includes a 25% "casual loading" to account for the fact that there is no sick leave, annual leave or guaranteed minimum hours).
However, this doesn't consider the fact that the drivers supply their own vehicle as well as out-of-pocket expenses for fuel, maintenance and general depreciation on the vehicle itself. When you take these additional costs into consideration, that initial ~$27 looks closer to an illegally low ~$20/hr.
The fact that they were both unpunished for finding loopholes in employment law as well as given a free pass to continue for another 3 years (despite literally being Amazon and therefore having the working capital to pay their drivers properly immediately) looks like it's a win for them.
Why should companies or people be punished for finding and using loopholes? By definition, loopholes are perfectly legal. They may be against the spirit of the law, but they are still legal.
late Middle English (in the sense ‘dependent on one's will or pleasure, discretionary’): from Latin arbitrarius, from arbiter ‘judge, supreme ruler’, perhaps influenced by French arbitraire .
Literally comes from the Latin word for a judge!
You answered it yourself. They're against the spirit of the law.
In any other circumstance where rules or obligations are enforced, exploiting loopholes is completely unacceptable behaviour.
(To clarify, I'm not arguing that the judge made the wrong decision in this particular case. Instead, I don't think this type of behaviour should be tolerated by the system at all.)
and if you're against the spirit, but find a loophole? you do not technically break the law, and achieve your objectives.
The law maker is at fault, if there are loop holes.
It's very tough to distinguish loopholes that were added accidentally by lawmakers, and loopholes that are added intentionally to appease corporate donors.
A lawmaker isn't legally required to include your provision just because you donated to them.
Taking the idea of wage theft as an example, the spirit of the law is that as a society we typically don't want to be exploited by companies, but there exists no shortage of capitalists who are against the spirit of that suite of laws. I would call them antagonists to those ideals of society.
It would be interesting to hear about a law who's spirit you are against, and to try and match it up with a societal ideal. I can't come with anything myself right now. Perhaps weed? It's still mostly illegal here, but I think many courts in this day and age would be lenient, as it becomes clear that society's ideals have changed in that area.
(edit: I edited this comment a lot as my thoughts evolved on it, sorry if anyone caught it mid-edit)
This is not right. If the spirit of the law is obvious, write it down.
Otherwise you're just advocating for people having to know the letter of the law (even when paying more money is against the spirit of the law, that will not matter; only when it's about paying less money), and the spirit of the law, whatever that is.
If a state's only job in this regard is to write down some rules that let it get free money from workers, it should take responsibility for writing the rules down properly.
Writing down law that would close loopholes with specificity is bad for business, which has symbolically been expanded to include other skin colors and genders so it can be argued the people having their agency back is actually regressing gains for some (gains in an intentionally manipulated ledger of exchange value thanks to loopholes).
Never mind the industrial mess threatens the species. The tribal fractal anyone happens to live in must never change!
It’s become a truism we want this because no alternatives are allowed to be.
You simply can't codify everything, just like in software, there are bugs in law, and people will take advantage in weird and unusual ways. Courts come in and remedy the outcome of the bug, and that ruling is used in future cases to make better decisions, so you can consider that a hotfix.
> (even when paying more money is against the spirit of the law, that will not matter; only when it's about paying less money)
The literal law is to not pay people below Australia's legal minimum wage. It's not a "target wage", so going over it is obviously not relevant, it is the bare minimum. The spirit of that suite of laws is to stop companies from exploiting workers.
No, your lawmakers made overly complex, bad laws.
The whole industry is screwed. And I'm a hypocrite because I order stuff online as well.
As long as you can bribe - oops sorry I meant donate to your local politician(s) to keep these 'perfectly legal' laws intact...
Probably not because a lot of societal norms are regulated by shame and shared ideas of decency. This decision was made by a person or small group of people inside Amazon. Maybe those people wouldn’t have made that decision if their identities could become public?
it should be acceptable.
> a lot of societal norms are regulated by shame and shared ideas of decency.
and i think that's wrong - if it's not a good idea to perform certain actions, then enshrine it in law, and explicitly say it's not alright to do.
There is a saying: "Legislate in haste, perish at leisure". Not all things should require legislation, and those that are to be legislated should be fully and thoroughly considered. Often times it can be best to rely upon the moral will of society to impart a desired action than it is to strictly enforce compliance with that action. Its not perfect, but neither hard-line or soft-line is.
This seems like deliberate silliness. Someone somewhere is writing down rules about how much money they get from you. If you don't obey the rules you get locked up. If you do obey the rules you don't. This isn't about doing things not specifically illegal; this is about how it's okay to obey the rules someone wrote down.
A note for people thinking this is groundbreaking, it will be when it applies to the vastly larger competitor who pays hefty dividends each year to the federal budget.
Pardon my ignorance on AU tax law, but is there anything the contractors do with those costs? For instance, in the USA if you are a contractor you are able to 'write off' those costs from your taxes (to be clear here, in most/all cases you are only getting back the taxes you paid on the money you paid for the service, e.x. if you are taxed at 20% and you paid 100$ for repairs to your contractor vehicle, you get 20$ back on your taxes, not 100$)
You don’t think drivers consider that?
> The fact that they were both unpunished for finding loopholes in employment law
Is it a loophole ? Close it
It isn't even relevant if potential drivers are excellent with money. If you advertise a position with excessive externalities -- a really, really terrible job -- the only people that accept it will, by definition, have miscalculated the externalities, and certainly some people will still accept it. Are we then supposed to just say "they are smart so they wouldn't have taken it if it wasn't a good job" and ignore it? People get scammed all the time.
idk if this applies to the case of Amazon AU. I'm just saying it's very in vogue to deny that anyone could benefit from help and that doesn't quite seem right.
Things like insurance alone can be a tipping point - and drivers famously didn’t carry enough of the right type of insurance, which works fine most of the time …
Taking advantage of the fact that most people are bad at the math is frankly immoral (a similar argument probably applies to the lottery also but nobody likes mentioning that either).
In a vaccuum, yes, people are losing money on the lottery. I personally see it as kind of a "lesser of two evils" kind of thing, though.
It allows people to scratch the "if I were rich" itch that causes some folk to risk everything they have (note that the exact same imagery is used to advertise both the lotto and high-risk speculative investments/ponzi schemes) while limiting the losses to the cost of a ticket each week.
Not saying that lottery addicts don't exist, but they're far less likely to lose everything than a problem gambler/day trader.
Although not reliable enough to get the title character encoding right.
[0] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWI...
Good write up of various contractor cases over the last year, here:
https://hallandwilcox.com.au/thinking/virdis-and-moffet/
"The cases also mark the ATO departure from its long-standing position regarding fee splitting arrangements in the medical field in ATO ID 2011/87, which was withdrawn on 23 August 2021 based on the decision in Moffet. Importantly, ATO ID 2011/87 reflected the ATO’s position for almost 10 years, and has been relied on by many businesses"
Isnt that how many software developers on contract work who have 1 year contracts which are usually renewed.
Paying someone minimum wage is the employer saying "I would pay you less but the stupid government won't allow it"
Treating someone in this position as an "independent contractor" is clearly an attempt to circumvent wage and other labour laws.
(And no, obviously this isn't the case for highly paid IT contractors with several customers )
I'm glad my government stopped that bullshit over a decade ago.
Edit: I conflated employee with salaried. I believe he was hourly because he got overtime, but he was still an employee.
Now I work for mega corp, I get paid the same wether I work 40 hours or 80 hours - and have been averaging 55-65 for months now. Like my job, so not complaining, but overall I preferred the control and extra pay being an IC gave me.
No everyone wants to be an IC, but for those that do, the option should exist - nobody forces you to be an employee or an IC - especially in this market. Let people decide for themselves.
As to delivering packages, in general the way this works is that as a UPS driver you have a delivery area. You show up at the depot in the morning and they load your truck full of packages, then you go and deliver all of them. Maybe it's different for the little Amazon vans, but for the big UPS trucks they don't go back for more. They are loaded to the brim for the day, and the driver delivers all of those packages to return only in the evening when they are done. They do this because their delivery area may be 20 or more miles from the depot; it doesn't make sense to do a 40 mile round trip each day more than once.
So where is the opportunity to deliver more packages as an IC? And where is the evidence that a company like UPS is bogged down by having unionized employees, whereas FedEx is not having ICs?
> nobody forces you to be an employee or an IC - especially in this market. Let people decide for themselves.
Do you disagree that employers sometimes abuse their employees by mislabeling them as one or the other? The whole point of the IC vs. Employee distinction is that it's based on what you do and who controls it. It's my understanding that the line between IC and employee can very easily be crossed, leading to a situation where the company has an employee for less than what they should be paying them if they were following the law. Why can't the government enforce the law in situations like these?
No, but I for one am very opposed to the drive by some (not you) to do everything they can to make it next to impossible for companies to use IC's (many have stopped for fear of them being reclassified down the road) - there are plenty of people that want to operate as IC's and there are others that would prefer the 'security' of being an employee (in quotes, because imo, being an IC is often more secure than being an employee because one often has multiple customers and is constantly needing to 'sell' their services).
I have no problem with people that would prefer to be an employee, not any problem with people who prefer to operate as an IC - I have done both, and would prefer both options continues to exist; people should be able to decide which model they prefer.
In my field - I used to be able to IC with almost any company large or small - then big companies got spooked and they will hire you as a 'contractor', but you need to do it thru an agency who more often than not will only allow you to work as an employee on a W2 (USA) - which take huge cuts of the gross that the 'real' customer is paying - sometimes 25-50% of the actual amount billed. What was supposed to 'help' the little guy, ends up screwing them, at least some of them.
Amazon's retail business has very thin margins. It's not running at AWS margins.
But anyway, if the answer to workers who don't earn enough is always "switch jobs/work harder/work more" why is the answer to companies who don't earn enough never "switch industries/remodel your business"?
[1] https://www.forbes.com/sites/stevendennis/2022/02/07/what-we...
It is much easier to pay for results on a per delivery basis. Did you deliver the package? If yes, you’re paid $x. If your metrics look bad, they don’t renew your contract.
The decision was made by a single commissioner - I'm not sure on process of this case but typically in the Industrial Relations Commission you can appeal to a full bench (perhaps also to a higher court). I think we'd all expect Amazon to do so.
- Incentivises Amazon to hasten roboticisation and automation
- Increases delivery costs, which are passed on to consumers
- Consequently consumers buy less, hurting sellers
- Disincentivises driver productivity (since they get the same either way)
- Removes price signal to underperforming drivers to try another profession, thus misconfiguring the labour market (not in a massive way, but still inefficient)
What a terrible trade…
This means employees can pick and choose who they work for.
When some professions pay more than others, that's an important signal to the labour force to consider swapping. It shouldn't be assumed to be meaningless or flippantly legislated away.
But now they can get paid more without swapping. Honestly, a cynic would think you're just scrambling around for any rationale to justify your ideological hatred of workers getting decent wages.
We should seek to make sense of microeconomics no differently to how Attenborough seeks to understand the natural world. To observe, analyse, explain, and ultimately try to understand what's going on. We can't infer he has a "hatred" of dung beetles because he explains their activities!
Price floors introduce distortions which reduce efficiency. It's easy to look at one tiny labour market, like NSW Amazon delivery drivers, and think it's great drivers will make more. Now consider when they go to spend that money. They will have slightly reduced range (some sellers will no longer be profitable and will cease selling), and their pay won't go as far, since they themselves will, like everyone else, be paying more for delivery.
Now for the mind blowing part: consider what happens when everyone attempts the same trick of legislating a price floor in the market for their own labour.
Now everyone's pay goes up 20% but when they go to spend it, it only goes 60% or 50% as far as it once did when markets were efficient.
This doesn't even touch on 2 other major considerations of price floors:
1. If wages are low in one profession, you must ask "compared to what?", and if the answer is another higher-paying profession, then you should consider switching. That is allocative efficiency. It's easy to overlook the gains when thinking of a few hundred workers, but across an entire populace, the gains are enormous.
2. A price floor on labour will put some people entirely out of work, since some people's marginal value will be less than the floor. As a rule of thumb, any NSW driver who doesn't produce A$37.80 of value per hour for Amazon won't have a job after the measure is fully phased in.
In the real world, there's plenty of evidence that minimum wages have a positive influence of employment, wellbeing, and allocative efficiency.
To the extent that they eliminate jobs in truly low-productivity sectors, that's actually a good thing, as those people can be moved into higher productivity sectors - you just need a welfare state that handles the income instability and retraining costs for those involved.
I mean inequality is a poor metric anyway. Absolute communism reduces inequality to zero, but it doesn't improve overall outcomes.
That incentive already exists.
> Increases delivery costs, which are passed on to consumers
Good
> Consequently consumers buy less
Good
> Disincentivises driver productivity (since they get the same either way)
Fine
> Removes price signal to underperforming drivers to try another profession, thus misconfiguring the labour market (not in a massive way, but still inefficient)
Nonsense.
Why should we care and how tough Amazon has it, if ignoring that threshold really means "yeah, we're fine with some more poverty-while-working in the society"?
Correction: keep some people out of poverty.
Higher prices -> fewer purchases -> fewer parcels being delivered -> fewer drivers required.
Drivers who were once required but aren't any more aren't pushed away from poverty, but toward it.
And that's ignoring the fact people get support when they don't have work. (Yes, Centrelink sucks in many ways, but it exists)
Given the extremely low unemployment that you referenced in another comment, it doesn't look like we have issues with fewer drivers required tbh.
a) force companies to service a minimum liveable wage and maybe pay some higher prices (or see a corporate profit margin decrease) b) pay more taxes to cover the long term social cost of a citizenry who can't afford food/healthcare/education/etc
c) Both of the above.
They've boycotted Australia before
I think they've just setup their airline to run out of Brisbane Airport just over the NSW border in QLD (they were hiring a Chief Pilot on our local wanted ads in 2020)
I could see them excluding the area from the normal time guarantee, or from free shipping or something.
They send it via the normal postal service or you pay the extra for the higher priced service.
That's good. If the choices are paying workers below minimum wage, or not selling in Australia... I hope they just don't sell/deliver in Australia. We're not really losing much that way.
Or they could just do what everyone else is doing and use AusPost or curriers - also better than Amazon delivery taking over.
I think most Australians aren't yet aware how much better online shopping is everywhere else, and my bet is Amazon is getting ready to crush the local competition.
Australians are used to using alternatives to Amazon, and I hope they continue to do so. Amazon’s awful treatment of workers has no place in Australia.
They are even more efficient than Amazon and introduced third party sellers a few years ago. And so far they are quite successful in fighting off Amazon. Just goes to show Amazon is not unbeatable.
Amazon isn't drop shipping. Drop shipping is when the goods are sent straight from the manufacturer to the consumer. Most orders on Amazon are using Amazon Prime/fulfilled by Amazon meaning the goods (whether third party owned or Amazon owned) were stored in Amazon's warehouse before they were shipped to the costumer. Prime 2 day/1 day delivery would be impossible if the goods were dropshipped from Asia.
It just means another party besides the seller is fulfilling the order, such as any product on Amazon shipped by the marketplace seller.
Dropshipping, specifically, means that the seller doesn't actually own any of the items they sell, and instead forwards any orders they receive to another business. This is of course very low-risk, as the seller doesn't tie up any of their own capital in a potentially bad product.
Amazon's service, FBA, is an example of something similar called "third party fulfillment". In this arrangement, the seller physically owns the stock they sell, but contract out Amazon to store and ship it. The seller must put the money upfront to buy the products, and if it turns out to be a flop they eat a big loss.
https://www.nsw.gov.au/about-nsw/key-facts-about-nsw#toc-pop...
Amazon was not a party to the legal action, but is presumably affected by its ruling.
Well I mean. Sure, set a minimum. But the labor market was working fine anyway.