Stranded at Sea, Labor Dynamics and Amazon's Union Vote

After spending almost four years aboard the MT Iba, the five-member crew is finally able to go home. [1] The ship’s owner, Alco Shipping Services, fell into financial trouble and stopped paying wages 32 months ago. With the 1958 Geneva Convention on the High Seas, ships are governed by the state they are registered in—their “flag state.” The majority of ships sail a flag from open flag states or “flags of convenience” including Panama, Liberia, Marshall Islands, Bahamas, Malta, Cyprus, and several Caribbean island nations. This system of open registration, combined with minimal international law, makes it hard for authorities to force owners to take responsibility of abandoned vessels. A ship’s crew, however, can be held liable for abandoning a vessel resulting in situations like the MT Iba. To survive, the crew relied on donations of food and supplies from The Mission to Seafarers. The charity also helped mediate negotiations with the ship’s owner who wanted to sell the vessel. After 43 months at sea, the crew settled for $165,000 in collective back-pay and disembarks to a changed world. [2]

The maritime trade can be hard work with extended deployments in the best conditions. The coronavirus pandemic is not those conditions. There are more than 1.2 million seafarers in the trade, and in a typical month roughly 150,000 change over at ports around the world. [3] The pandemic severely disrupted this process with port closures, disembarkation restrictions, a reduction of air travel, restrictions at border crossings, and consulate closures affecting visa processing. At its peak last year some 300,000 seafarers—20 percent of the global workforce—were stranded at sea waiting for relief from deployments beyond their contract dates. Meanwhile, shipping companies, labor unions, and maritime authorities are navigating a variable patchwork of pandemic-related restrictions, and significant disruptions to global trade flows. [4]

The pandemic has had a significant impact on the U.S. labor market as well, and there are signs of improvement. Last week’s total unemployment insurance claims fell 0.1 percent from the previous week. [5] And while there were still 730,000 new unemployment insurance claims last week, this was down from 861,000 the week prior. Last month’s unemployment rate improved as well dropping 0.4 percentage points to 6.3 percent. Job gains were seen in education, and professional and business services. [6] National unemployment figures for February will be released next Friday. [7]

These totals, however, do not reflect the true impact of the pandemic on jobs. Leisure, hospitality and retail in the U.S. continued to shed jobs in January. There were losses in health care, transportation and warehousing as well reversing trends from last year. [8] Some of those losses are due to business disruptions. Some are employees leaving the workforce due to a lack of childcare. According to an analysis of the U.S. Census Household Pulse Survey, 1.2 million people in 35 states cited lack of childcare—school or daycare—as the reason they left their job between April and December last year. [9] This trend increased by 36 percent over the period showing the increasing toll of school and daycare closures.

The lack of childcare options and other economic disruptions has had a disproportionate impact on women. In the U.S., women left the workforce at four times the rate as men in September. [10] An analysis of Indeed job postings across 22 countries shows a significant gender gap in job postings last year as well. [11] Postings for jobs with low female representation fell 37 percent and ended the year down 18 percent. Postings for jobs with high female representation, in contrast, fell almost 43 percent and ended the year down 25 percent. There was a similar gap based on skill level with low-skilled postings dropping almost 45 percent at the height of the pandemic compared to a 35 percent drop for higher-skilled jobs.

The near-term impacts have long-term implications. Remote work, e-commerce and automation trends have accelerated over the past twelve months. According to a new report from the McKinsey Global Institute, this acceleration means more than 100 million workers may need to switch occupations by 2030. [12] That is 25 percent higher than previous estimates. Job growth is expected to be concentrated in high-wage occupations including technology, health care, management and business/legal professions. The report looked at labor markets in eight countries including the U.S., Spain, U.K., France, Germany, Japan, China and India.

The Bureau of Labor Statistics (BLS) also released a new report assessing the long-term impact of the pandemic on jobs in the U.S. [13] A number of industries are expected to benefit from structural labor market changes. Employment in research and development in the physical, engineering, and life sciences is projected to more than double previous estimates. And employment in pharmaceutical and medicine manufacturing may grow by as much as 20 percent by 2029.

The BLS also expects telework to be offered on a more permanent basis in those jobs where working from home is feasible. This will help drive employment growth in computer manufacturing and services, IT support services and cybersecurity. It also has significant ramifications for food service, transportation, construction and a number of other industries. Prior to the pandemic, air transportation, transit and ground transportation and nonresidential construction jobs were expected to grow between 4 and 6 percent. The new assessment revises all of these down with jobs in nonresidential construction potentially falling 4 percent—a net adjustment down 8 percent—by 2029.

Long-term employment trends in retail may be significantly impacted as well. The report estimates there may be a decline between 4.4 and 7.2 percent from 2019 levels with as many as 1.1 million jobs permanently displaced by 2029. These impacts are attributed to trends that were already in motion and have been accelerated by the pandemic including the growth of online shopping, continued consolidation of big-box stores and a reduction of the overall physical retail footprint.

The shift to online shopping has been a boon for online retailers like Amazon. The company hired over 425,000 people between January and October of last year—pause and let that figure sink it. By December it employed 1.3 million people worldwide and generated over $125 billion in net sales, its largest quarterly revenue ever.

Amazon’s growth has not come without challenges. By October the company had nearly 20,000 employees who had tested or were presumed positive for COVID-19. And frustrations with working conditions reached a boiling point at an Amazon warehouse in Bessemer, Alabama where 5,800 workers are voting on whether to join the Retail, Wholesale and Department Store Union (RWDSU). [14]

Less than 11 percent of American workers are represented by unions—down from 35 percent in the 1950s. Many Amazon warehouses in Europe operate under union agreements, but the company has long resisted unionization efforts in the U.S. [15] In Alabama, concerns about the pace of work, risk of injuries and risk of COVID-19 escalated last summer. By November warehouse workers notified the National Labor Relations Board (NLRB) their intent to unionize and by mid-January had gathered 3,000 signatures in support.

To request an election, the NLRB typically requires 30 percent of a facility’s employees to sign a card supporting it. The Bessemer workers easily exceed that threshold and so the election was announced. In response, Amazon petitioned to delay the vote rejecting a mail-vote and safety concerns with in-person voting. (Sounds familiar.) The petition was denied by the NLRB and ballots were sent February 8. [16] The election closes March 29, and if successful could pave the way to organize Amazon (and other) fulfillment centers in more pro-union states like California, Minnesota and New York.

We all seem to have a favorite word to describe the state of the world these days. “Dynamic” is mine today.


Have thoughts or feedback? Anything I missed this week? Email me at kellen@supplychainweekly.com. You also can reach me on LinkedIn and Twitter.

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References

[1] https://shippingwatch.com/carriers/article12777773.ece

[2] https://www.reuters.com/article/emirates-oil-tanker-int-idUSKBN2A91NS

[3] https://unctad.org/webflyer/review-maritime-transport-2020

[4] https://www.bloomberg.com/features/2020-pandemic-shipping-labor-violations/

[5] https://oui.doleta.gov/press/2021/022521.pdf

[6] https://www.bls.gov/news.release/archives/empsit_02052021.htm

[7] https://www.bls.gov/ces/

[8] https://www.bls.gov/news.release/archives/empsit_02052021.htm

[9] https://www.thirdway.org/memo/child-care-in-crisis;

[10] https://www.npr.org/sections/coronavirus-live-updates/2020/10/02/919517914/enough-already-multiple-demands-causing-women-to-abandon-workforce

[11] https://www.imf.org/external/pubs/ft/fandd/2020/12/value-of-real-time-data-in-covid-crisis-chen.htm

[12] https://www.mckinsey.com/featured-insights/future-of-work/the-future-of-work-after-covid-19

[13] https://www.bls.gov/opub/mlr/2021/article/employment-projections-in-a-pandemic-environment.htm

[14] https://www.nytimes.com/2021/02/18/magazine/amazon-workers-employees-covid-19.html

[15] https://www.theguardian.com/technology/2021/feb/23/amazon-bessemer-alabama-union

[16] https://www.nlrb.gov/cases-decisions/decisions/unpublished-board-decisions; https://www.npr.org/2021/02/07/965162338/in-alabama-workers-at-amazon-warehouse-are-poised-for-union-vote