Why Amazon Employees Are Striking in Germany

Trouble has been brewing for Amazon.com  (NASDAQ: AMZN  )  in Germany for the past few months. Some employees have walked off the job on multiple occasions in order to put pressure on the retailer as the Christmas season hits its high gear. The strikes have been organized by the German trade union Verdi, with a walkout this week involving 1,115 Amazon employees. The company has said that the strikes will not affect shipping for the holidays.

Mail-order versus logistics
The basics of Verdi's complaint boil down to definition. Right now, the e-commerce giant considers its employees to be logistics workers, but Verdi thinks they're mail-order or retail workers. For employees, this has two implications. The first is immediate, because Amazon has said that it pays its employees a fair rate based on the German average for logistics workers. A change in designation would force Amazon to rethink its compensation.

The second implication is more long-term, and would only come into play if Amazon also agreed to engage in some sort of collective bargaining regarding wages. At that point, workers would see another increase, as Verdi's standard for mail-order and retail employees -- a standard that Amazon would likely be held to -- is also higher than that of logistics employees.

Verdi's argument is that while logistics employees are engaged in very little other than shipping, Amazon employees undertake all sorts of tasks -- photographing goods, buying goods, picking out items from a warehouse, etc. -- that employees at companies like DHL don't.

The impact on Amazon
Amazon seems unlikely to bow to Verdi's demands. The striking workers represent less than 5% of the company's full-time and seasonal employee base in Germany. The company has also said that the strike has had no effect on day-to-day operations. Having said that, Amazon did reportedly issue Christmas bonuses in the middle of the strike. Verdi said that the extra pay was a result of the labor action, but it's not clear that there's a link.

The other minor impact that Amazon has seen was a spillover protest at its Seattle headquarters. Again, the size of the protest was probably too small to keep Amazon from feeling any pressure, but it is one more link in the long chain of employee unrest that seems to be growing at the retailer.

Much of the public focus in Germany developed from a documentary showing seasonal workers being harassed by security. Whether this strike turns into a bigger concern for Amazon or not, the company is seeing more dissatisfaction than in previous years. While the company doesn't need to agree to every demand, the dissatisfaction needs to be addressed, or more disruptions -- which will eventually take a toll on the business, as well as the stock -- are on the horizon.

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