Above photo: Walmart has long faced scrutiny over low wages in contrast with the net worth of its majority owners. Bloomberg/Getty Images.
Human rights expert says US companies trap workers in poverty, forcing them to rely on food stamps and Medicaid.
The UN special rapporteur on extreme poverty and human rights has called on the CEOs of Amazon, Walmart and DoorDash and the US government to address allegations that top US corporations pay such low wages that they trap workers in poverty, forcing them to rely on government-assistance programs to survive.
Olivier De Schutter has written to the three major US corporations and the US government, requesting responses to numerous allegations. They include a 2020 US Government Accountability Office report that found Amazon and Walmart were listed among the top 25 employers with workers relying on the supplemental nutrition assistance program (Snap), formerly known as food stamps, or Medicaid in nine states studied, with Walmart ranked first and Amazon ranked sixth.
The letters and requests were made public on 31 October.
“The concerns apply to many workers in the US, which relates to how the minimum wage is set in legislation, whether at federal or state level, wage theft by employers, unpredictable yet inflexible working schedules, the sake of undocumented workers, violation of union rights, and automation, these are the most important issues that apply across the workforce in the US,” the letter said.
De Schutter said that his major concerns were the US minimum wage, wage theft by employers, unpredictable yet inflexible working schedules, the plight of undocumented workers, the violation of union rights and automation.
“What these companies do for the most part is not illegal. What they do is use the loopholes in the system – for example, misclassifying workers as independent contractors rather than employees. There are many loopholes in the system that the US government is still responsible for and I’m still expecting an answer from the Department of Labor,” said De Schutter.
Based on the US Bureau of Labor Statistics’ definition of working poor, individuals making $14,850 or less annually – comprising 6.3 million people and 4.1% of US workers – are classified as working poor in the US.
The trio of corporations and the government were asked to reply within 60 days of receiving the letters, with only Amazon providing a reply, though De Schutter argued that Amazon’s response did not address several concerns noted in the letter. DoorDash responded after the letters were made public, disputing the allegations and claiming they will provide a response in the coming weeks.
In the letter to Amazon, De Schutter noted the Department of Labor’s current investigation into the company over high injury rates and the company’s record of anti-union practice at its US facilities.
DoorDash is one of the leading gig platforms to have faced scrutiny over its classification of workers as independent contractors, and how it determines pay based on active time as opposed to when workers are on call. It has opposed wage increase ordinances for workers amid complaints over low pay linked to its gig worker model.
Walmart, the largest employer in the US, has long faced scrutiny over low wages in contrast with the company’s immense profits and the estimated net worth – more than $240bn – of the company’s majority owners, the Waltons, the wealthiest family in the world. The company also has a long record of aggressive union busting against worker-organizing efforts.
In the letter, Amazon dismissed claims of low wages and didn’t dispute workers relying on federal assistance programs. But it claimed that the company’s wages either make workers ineligible for federal assistance programs such as Snap; workers received federal assistance before employment at Amazon while they were unemployed; or they receive assistance based on other circumstances, such as household size or the qualifying disability of a household member.
Amazon also disputed complaints of violating union rights of workers, but reaffirmed its opposition to the win of workers who voted to unionize at the Amazon warehouse in Staten Island, New York, in 2022.
As of 1 October, there were 222 open or settled unfair labor practice charges against Amazon with the National Labor Relations Board, according to the NLRB.
Amazon reportedly spent more than $14.2m on anti-union consultants in 2022.
“The rates of unionization have been declining very significantly over the past 40 years in the US, much more than in other OECD countries. The problem of course weakens the bargaining position of workers,” said De Schutter. “On the question of respect for union rights, that is, I think, very shameful.”
He said the rate of workers covered by collective bargaining agreements in the US was far below the rates of other wealthy countries, with Italy and France covering 100% and 98% of workers respectively compared with 11.7% of workers in the US, based on 2018 OECD data.
De Schutter noted the stagnant federal minimum wage of $7.25, which has remained unchanged since 2009, with 20 states whose minimum wages are no higher, and stark inequalities facing women in the US workforce.
“The wages in the US have really not been keeping up with the increased cost of living. In many countries, wages are systematically aligned with increases in the cost of living. This is not true in the US,” said De Schutter. “I was very surprised to see that workers with a high school diploma today make 2.7% less in real terms than they did in 1979, almost 50 years, which is really amazing and this is of course during a period where the productivity of workers has doubled.