The Warehouse Archipelago pt. 4

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As many as four million workers labor in clusters of warehouses scattered across the United States. Many are mislabeled as ‘temps’; all are poorly paid, and on-the-job injuries are high.

In the article “The Warehouse Archipelago”, John Lippert and Stephen Franklin investigate the current state of staffing in the warehouse industry.

Part Four of the weekly Chicago Reporter series Lippert and Franklin explore the reopening of the economy battered by COVID-19 mitigations providing new hope for warehouse workers.

THE NEWS ABOUT worker shortages and rising wages at companies with the reopening of the economy may suggest new hopes for warehouse workers. Indeed, at a new warehouse in Joliet, Harbor Freight Tools will pay $19.50 an hour, says Doug Pryor, vice president of the Will County Center for Economic Development. Wages are also rising at small warehouses that rely on temporary workers, he adds.

Beth Gutelius agrees that labor shortages might finally be reversing the wage stagnation that has plagued both temporary and permanent warehouse workers in the U.S. for 20 years. The average wage for a warehouse worker in June 2021, according to one wage-tracking firm, was $12.81 an hour—not a lot to feed a family on.

But the pay gap between full-time workers and temps won’t disappear entirely. In the end, Gutelius predicts, rising wages may mean that employers will turn even more to temporary workers.

Moreover, companies that rely on warehouses are still encouraging turnover. In Amazon’s case, the churn rate has reached 150 percent per year, according to The New York Times. For longtime workers—those who stay more than three years—Amazon stops giving annual pay raises and offers a $1,000 bonus if they leave, according to Bloomberg. Amazon also recently closed a Chicago warehouse where workers had staged a series of protests during the pandemic.

The anti-union tactics Amazon used to block an organizing drive by the Retail, Wholesale and Department Store Union (RWDSu) in Bessemer, Alabama, are employed widely across the industry. The mammoth company now faces another, and larger, potential challenge from the Teamsters union, which has created a division to organize Amazon and urged its members to back an all-out national effort.

But regaining a foothold among warehouse workers and drivers serving the warehouses has proved to be difficult for the 1.2 million member union. Employers’ determination to resist unions at all costs—a determination abetted by the inadequacies of labor law—are a potent obstacle to unionization. Teamsters union officials say that until recently five XPO facilities had voted to join their union, but none had contracts. But in July, workers at XPO facilities in Miami and Trenton, New Jersey, finally won contracts with the company, six years and four years, respectively, after voting to become Teamsters.

At the same time, workers at several XPO locations, where contract bargaining was going nowhere, have voted the union out. These efforts have been supported by the National Right to Work Foundation, according to news reports.

XPO offered this take on unions’ lack of success at its U.S. facilities in a filing with the Securities and Exchange Commission. “As of December 31, 2020, 75.8% of our employees in Europe were represented by unions or other employee representative bodies, while almost all of our employees in the United States have chosen to remain union-free,” the company said. Out of 35,000 employees in the U.S., unions represent just 231 XPO employees, among them workers at a small Indiana facility recently organized by the Machinists Union, according to an XPO official.

A likely reason for unions’ failure has been XPO’s resistance. Between 2014 and 2018, the firm racked up 120 unfair labor charges with the National Labor Relations Board, according to an extensive 2020 report on the firm by unions in the U.S. and globally. The report cited a statement from the company’s employee handbook: “It is the company’s position that it can best achieve a competitive position in the transportation and logistics industries by remaining union-free. XPO will do everything legally possible to remain in that position and to convince the company’s employees that they have no need for representation by an outside party.”

XPO Logistics, Inc., has paid over $47 million in fines, penalties, and court cases for employment-related issues since 2000, according to Violation Tracker, a research tool of Good Jobs First, a Washington, D.C., organization that promotes government and business accountability. Despite unions’ complaints, an XPO official told us that the company “respects the right of every employee to choose or decline union membership.”

How to account for the company’s success at thwarting unionization in the U.S., while more than three-quarters of its European workforce is unionized? It’s not that XPO supports unionization there while opposing it here, or that the issues American workers confront are wholly different from those in Europe. In large part, it’s because the tactics XPO uses to defeat unions in the U.S. are forbidden by European laws, while American labor law imposes no serious penalties for the same offenses.

XPO’s business, meanwhile, is booming, with a 24 percent increase in revenue for the three months ending in March over the first quarter of last year, and a 40 percent increase in its share price for the first half of 2021. XPO recently said it would be splitting its trucking and logistics operations into two separate companies.

THE PANDEMIC brought a burst of scrutiny to the archipelago. Warehouses and factories were second only to nursing homes in COVID cases reported in Illinois, according to a January 2021 report by Warehouse Workers for Justice and the Chicago Workers’ Collaborative. At least 165 outbreaks occurred in ware-

houses, factories, and food service facilities, the report said.

But workers’ pleas for help got limited support nationally from the Occupational Safety and Health Administration (OShA) during the Trump administration (a situation that the new administration has promised to fix). According to figures for 2020, at the peak of the pandemic, OShA’s warehouse inspections across the U.S. not only didn’t rise with the number of warehouse outbreaks; they actually dropped by more than a half, falling to 100, the lowest number in over a decade. Total fines fell by 61 percent from the previous year, according to Good Jobs First.

Oscar (not his real name) worked in a small 200-person combination factory/warehouse in southern Wisconsin. Most of the workers were Latina. “The money I was getting was not enough to live on, but to survive,” he says.

When he fell sick with COVID-19 in the spring of 2020, he had no medical benefits and no financial help from the staffing company. He knew about 15 of his fellow workers who had caught the virus, and one, a 55-year-old friend, had died. Despite that, he doesn’t recall the company talking about sick workers.

The company fired him soon after the virus struck him. After 20 years in the warehouses, always working for staffing companies, he had no money, and no support to help him get by.

A small hospital in a northern Chicago suburb took him as a charity patient to help him deal with the virus. But he had to leave after a month, although he hadn’t fully recovered. He avoided taking a bath or doing anything physical for weeks afterward because his lungs hurt him so much. Out of work for months, he could not pay rent and then found a room in a nearby house. “I’m afraid,” he said, soon after leaving the hospital. “I don’t know what’s going to happen. I have trouble breathing.”

He eventually found a new job: doing lighter work through a staffing company.

Oscar’s warehouse was just one of many where management downplayed the pandemic. At the 1.4 million square foot warehouse that Mars opened in Joliet in 2017, a mammoth building 29 times the size of a football field, COVID-19 was racing through the workforce.

The Mars building is in a cluster of warehouses surrounding Joliet, 35 miles southwest of Chicago. Mothballed factories and steel mills dot the area. But the area is growing as a warehouse mecca that links more than 70 million people in the Upper Midwest to rail lines that run straight to California ports where container ships constantly arrive from China. The two-mile-long trains run back and forth along these lines every 20 minutes, every day of the year.

Mark Balentine worked on the candy-packing line in the Mars warehouse and is still angry about not being informed that one of his co-workers had tested positive. “I was bumping into her, my sweat into her sweat, and when I asked about not being informed, they said I was a troublemaker,” says Balentine, who later quit and is now an organizer for Warehouse Workers for Justice in Illinois.

Warehouse worker unionization fell from 28 percent in 1983 to 6.7 percent in 2018, due chiefly to opposition from employers like Amazon.

The lack of information posed unique problems for Ryan Johnson, one of the warehouse’s forklift drivers. He has diabetes and high blood pressure. His wife has rheumatoid arthritis; his sister-in-law, who lives with them, has multiple sclerosis; and his son has a heart condition.

“When I come home from work, the first thing I do is strip down and take a shower,” Johnson said in an interview last year. All the clothes I’m wearing go into the washing machine. All the jewelry I’m wearing, all the rings and everything, comes off and gets disinfected. My wife has clean clothes waiting.”

As the pandemic gained steam, 100 Mars workers—20 percent of the warehouse staff—signed a petition demanding hazard and quarantine pay and more and better protective equipment. They staged a protest at the company’s research center on Goose Island in Chicago in September.

Johnson was one of four Mars workers who spoke during their COVID-19 protest. Three had already been fired; in December, Johnson was fired, too. Despite requests, Mars did not offer a reply to the issues he raised.

Ronald Jackson is another protestor who was fired. He was ostensibly let go for refusing to open a box, but claimed his temporary staffing company, CoWorx Staffing Services, provided no written documentation of his alleged offense. The staffing company did not reply to a request for comment.

Jackson says he was actually fired for speaking out on safety problems, even though labor laws protect this kind of speech. He filed a complaint with the National Labor Relations Board. The board ruled that the company had indeed used threatening language but refused to order back pay or reinstatement, according to documents provided by Jackson.

After getting fired at Mars, Jackson refused an offer by CoWorx for a temporary job at another warehouse paying $12. “I didn’t refuse work, but I refuse to be treated like a slave,” Johnson says.

For Jackson, the fight for workers’ rights is a direct extension of the Black Lives Matter protests that raged across the U.S. last summer.

“Let’s be real,” he says. “If this were a white issue, with a white workforce, safety would be no issue at all. Precautions would be taken.”

In Part Five of the “The Warehouse Archipelago” series, how hefty campaign contributions mean primarily white, union workers wield far more clout in the Biden administration than Black and Brown unorganized workers.

“The Warehouse Archipelago” was first published in The American Prospect.

About the writers:

JOHN LIPPERT
John Lippert was a line worker for eight years at General Motors before becoming a reporter at the Detroit Free Press and then Bloomberg, where he was a s

STEPHEN FRANKLIN
Stephen Franklin is a former labor reporter for the Chicago Tribune and author of ‘Three Strikes: Labor’s Heartland Losses and What They Mean for Working Americans.’