Amazon is a bellwether American corporation, setting the tone for the market, the country and capitalism itself. This is as true as ever during the coronavirus crisis, where millions of Americans have relied upon the company’s services as they stay home.
We applaud the intent behind this statement from CEO Jeff Bezos, about its Q1 earnings: “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”
That $4 billion is set for personal protective equipment, facility cleaning, COVID-19 testing, higher wages for hourly workers, and enhancements to its delivery network to meet customer demand. Amazon also announced it would be allowing corporate employees to work from home until at least October.
These are tough decisions that epitomize the stakeholder approach. Investing in workers, especially at this time, is critical to ensuring the ongoing creation of long-term value for all stakeholders. At JUST, we want to see other companies making similar decisions to prioritize their workforce, their customers and the communities they impact at this time.
But we also recognize that in March and April, workers in Amazon warehouses and in the company’s Whole Foods stores walked off the job, citing a lack of protective equipment and safe working conditions. There is another planned walkout for today, International Workers’ Day. While Amazon has denied the veracity of some of these claims, they are concerning, and we will be tracking Amazon’s actions against its words.
Over the last month JUST has been collecting and analyzing corporate responses to the pandemic in our COVID-19 Corporate Response Tracker, with some of Amazon’s actions thus far, including:
- Raised base wages for its workers by $2/hour through May 16.
- Boosted overtime, offering workers 2x instead of 1.5x the hourly rate for time over and above the 40 hour regular work week.
- Announced new programs to provide additional financial assistance to its workforce, including a$25 million relief fund to support delivery service partners. Employees and contractors can also apply for grants from this fund.
- Employees diagnosed with COVID-19 or placed in quarantine will receive two weeks of paid leave.
This past week JUST released a significant update to the Tracker, introducing several new relevant metrics, including whether companies are providing personal protective equipment (PPE) for workers; providing accommodations for furloughed workers; or accepting government support.
As we track all of these metrics, both for Amazon and all other large employers across the country, we urge shareholders to see them as investments, with a return that will ultimately be to their benefit. Protecting the essential workers who are creating value is and should be priority No. 1, and will produce a payback that far outweighs any short-term gain.