
When Sears Flourished, So Did Workers. At Amazon, It’s More Complicated - danso
https://www.nytimes.com/2018/10/23/business/economy/amazon-workers-sears-bankruptcy-filing.html
======
whoisjuan
Sears' huge pension liabilities was cited as one of the main reasons that
prevented any possible re-structuring that could have saved the company when
it was declining and heading to bankruptcy... I mean, let's be realistic here.
For how long was Sears in this pitiful state?... Getting all that real estate
+ semi-established brand was a private equity's wet dream, yet nobody ever
contemplated that option.

And now that Sears is bankrupt, their pension fund is going into default and
passed to the government who will need to fulfill those obligations
(thankfully the pension benefit guaranty is not funded with tax revenues).

Of course, I'm not blaming Sears retirees. They deserve their pensions as much
as any other person. But the reality is that corporate America learned this
lesson a while ago and Sears is just one of many examples.

Is not about pleasing shareholders and fucking up employees as this article
claims. It's a problem of business viability and long-term expectations.

Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall
Street will fuck you up because your new shiny compensation model just shaved
the company revenue. And guess what, they will punish you at much larger
magnitude than your declining revenue. So that 5% of lost revenue is going to
cost you 20% or 30% of market value, and now all those stock grants are 30%
less valuable. So your great initiative just put you in a negative spiral. And
now your employees will be pissed, and the press will come and write an
article claiming that your once frugal company is now a money firepit and that
morale is low, completely forgetting their initial narrative on how you used
to fuck over your employees.

~~~
mlthoughts2018
I don’t necessarily disagree with many of your points, but I think drawing
attention to the end of Sears’ lifecycle is an unfair thing. Someday Amazon
too will have an end of life, and employees and shareholders will get fucked
over then too.

The article also draws attention to how workers benefited _in good times_ at
Sears, not near the end. And this is where the comparison is most meaningful,
where Amazon is more questionable.

~~~
Bricejm
Agreed. I worked at Sears in college (~15 years ago) loading dock/warehouse.
It was a great job at the time. Good pay, plenty of hours, and generally good
managers. The downfall of Sears had very little to do with wages, but Amazon
crushing all brick and mortar stores. We were dependent on foot traffic, and
sales flyers in the Sunday paper - things that don't do much today.

~~~
technofiend
IMHO Sears would have an opportunity now if they hadn't sold off their brands.
Cobranding (for instance) Anker products as Craftsman would have me buying it
there instead of Amazon for one reason: commingled inventory and fakes.

~~~
jpindar
They had SO MUCH customer loyalty from Craftsman, I can't believe anyone would
throw that all away.

~~~
abakker
the mismanagement of the craftsman brand will one day be a case study in all
business schools. It is incredible how much I spent on tools with them over
the years, and incredible how I'm not even sure where to buy them anymore.

IMO, the biggest mistake Sears ever made was NOT buying Home Depot when they
had the chance.

------
cheeze
I think tech workers at Amazon are closer to the Sears workers than
fulfillment center folks are.

My friends working at Amazon as tech workers are making money hand over fist
right now. 100+ stocks each grant.

On the flipside, Amazon has a "projected total comp" which they keep you at,
and if you're over projected, they don't give you more which is fucked. Google
gives you 80k in stock and doesn't tie your future say to it.

~~~
jorblumesea
It's not just Amazon, techies at most tech companies get generous stock grants
as there is a considerable talent war going on. Even non major players like
Priceline group now give equity.

------
paulpauper
Yeah I remember Bernie Sanders praised Amazon's decision in a tweet, but only
later did people and the media realize that increasing the minimum wage came
at a cost to other things, such as stock compensation. no free lunch guys.

~~~
steve19
Amazon realized that they kept getting a black eye because of their wages so
of course they pivoted. Now some workers are probably worse off. I blame the
media for only caring about sensationalist headlines.

~~~
pm90
What nonsense. Many thousands of workers will be compensated much better.
Other retailers will have to increase their wages. This is a good outcome.

~~~
chimpburger
Did you even read the article? Many thousands of workers will be compensated
less. The higher wages came at the cost of no more free stocks.

~~~
bryanlarsen
Nobody is going to be compensated less. The "extra" compensation they received
before was simply a consequence of the fact that Amazon stock quadrupled in
the last three years.

So if previously they got $14 + 0.50 in shares their total comp ended up being
$16. But they still got paid less than somebody who was paid $15 in cash
straight up (who could have then purchased AMZN on the market).

------
jorblumesea
If you're making 30k / year, having any kind of equity in lieu of traditional
compensation (bonuses, wage increases) is an extremely risky affair. Amazon's
stock has increased x6, but that is not normal, nor is it indicative of future
performance. For those living paycheck to paycheck, there are far better
methods of compensation that will ensure a higher quality of life without huge
amounts of risk. An increase of just $1-2 per hour would easily make up the
difference.

White collar workers can absorb the risk in the case of a market downturn, but
I'm not sure that blue collar workers can.

~~~
mjevans
It would be really nice if EVERYONE not in the 1% got a raise of some sort. An
extra 1-2 an hour or whatever...

However then the prices of everything would go up for everyone, just like they
are everywhere.

When the 'living wage' 15 USD/whatever minimums are passed don't the prices of
everyday living just rise to meet that extra cash in the market?

Meanwhile everyone who was previously making a little above minimum wage,
mostly the (lower/mid) middle class, get shafted, because they do not get
raises.

~~~
snarfybarfy
One can also argue that rising minimum wages directly benefit the economy as
this money will be immediatly consumed.

Giving $10 to a poor person will result in $10 more goods and services demand.
Giving $10 to a very rich person will probably make 1/10th of a share change
hands and have no effect on the real economy whatsoever.

~~~
tryptophan
This argument is a fallacy because it implies that money not spent is wasted
somehow, but that is opposite of the truth, that savings underpin investment
and thus growth.

~~~
moate
Considering that the largest economic problem of the last 20 years (well all
human history really, but it's been a keystone of economic strife recently) is
the dramatic difference in the wealth growth between the wealthy and the wage
increases of the remaining population, that whole "trickle down economics"
myth has been sorta shorted out.

"Growth" can represent too many things and is thus a great slippery beast that
can be used to obscure helping the wider population. We continue to see
economic "growth" but wage increases has been stagnant for decades. Owners
need fewer workers to amass revenue due to changes in the type economy as well
as automation. You can grow a business without benefiting as many people as
you used to. Look at how many people Bell Labs had working for it when it was
in it's heyday vs how many people work for Google now.

------
refurb
Why does the article keep comparing warehouse workers at Amazon with
salespeople at Sears? Those don't seem like comparable positions (sales comp
is often very performance based) and thus, compensation wouldn't be the same.

Maybe compare the salespeople at Sears with account managers or some similar
position at Amazon?

~~~
s_trumpet
> “Most of these people retired with a good pension,” said Jon White, who
> worked at Sears for 38 years, most recently as a manager in a store in
> Lithonia, Ga., before retiring in 2008. “Most of them are comfortable for
> the most part — cashiers, clerks, replenishers, all kinds of workers.”

~~~
refurb
It would have been exceedingly easy for the NY Times to do research to get us
some numbers. Instead we get this handwavy quote.

And this statement doesn’t invoke a lot of confidence for me. The article
talks about profit-sharing for salespeople, then this quote says “most”
retired with a “good” pension. So there were some that didn’t retire with a
good pension? Who were they?

And then the quote ends with “most” are “comfortable”. Comfortable is quite
different than the prior part about profit-sharing and retiring with the
equivalent of a million dollars today.

That quote is just so exceedingly vague it doesn’t answer the question that
The NY Times itself poses.

------
jpatokal
An interesting exercise in what Bezos could do about this if he wanted to:
[https://direkris.itch.io/you-are-jeff-bezos](https://direkris.itch.io/you-
are-jeff-bezos)

HN discussion:
[https://news.ycombinator.com/item?id=18276937](https://news.ycombinator.com/item?id=18276937)

~~~
partycoder
Stock money is not as liquid as you think it is.

It's not that he is Scrooge McDuck and all his money is in cash.

------
TylerE
Is it really complicated?

Workers are drones to be squeezed for all they have and then discarded.

------
huffmsa
Everyone seems to only focus on the blue collar staff at Amazon.

They're enot Amazon's main employees, developers are.

The warehouse staff will be mostly replaced by machines in the next 5-10
years.

~~~
ljf
Main employees - care to explain what you mean?

* Largest number of people?

* Largest share of total salary?

* Most 'important'?

\--

I think for a long time they are going to have a larger number of blue collar
workers than white collar. In in an automated future - who will look after and
maintain the robots? Don't forget that they now also own Whole Foods that
currently are 'people' heavy.

Quote: While Amazon employees at its Seattle headquarters make an average
salary of more than $110,000, according to Glassdoor data cited by the Seattle
Times, the paper reported Thursday that the company’s median employee earned
just $28,446 last year. That’s because the vast majority of Amazon’s 566,000
employees are not white-collar workers in Seattle but blue-collar workers
toiling in the company’s 140 “fulfillment centers” across the country
[https://splinternews.com/a-staggering-number-of-amazons-
empl...](https://splinternews.com/a-staggering-number-of-amazons-employees-
still-need-foo-1825389776)

------
arentiright
Why does NYT have it out for Amazon? Is it because Mr Bezos owns a rival
paper?

~~~
ryanhuff
I don’t know that the NYT has it out for Bezos, but he’s a very easy target.
He has a long reputation of treating employees badly while amassing enormous
wealth.

~~~
biocomputation
Yes, it's just this simple. I don't know why more people can't understand how
basic this is.

~~~
mtgx
The better question is - why are so many in such a hurry to defend
billionaires?

~~~
SmellyGeekBoy
I don't know, I think it's right to question journalists' motives in an
attempt to keep them honest. This works both ways.

------
donatj
And look how that worked out for them?

~~~
jaysonelliot
During their best years, when Sears was a genre-defining behemoth, workers
owned 25% of the company, and a warehouse worker could get the same kind of
retirement package a salesman could if they had the seniority.

They build an empire that lasted over a century, and flourished.

Sears' downturn didn't come until two decades after they phased out worker-
friendly policies like profit sharing, and their decline was based on poor
strategic decisions, not the profit-sharing that had existed decades earlier.

In other words, being excellent to their employees worked out great for Sears.

------
airstrike
Right, cause stuff is cheaper at Amazon.

------
purple-again
The sears salesmen directly drove revenue. He was being incentivized to
increase revenue. The warehouse worker is not directly driving revenue at
Amazon. The developers do...and they are being incentived to keep doing so.

The world changed, business stayed the same.

~~~
kibwen
According to the article, it would appear this was not limited to salespeople:

 _“Most of these people retired with a good pension,” said Jon White, who
worked at Sears for 38 years, most recently as a manager in a store in
Lithonia, Ga., before retiring in 2008. “Most of them are comfortable for the
most part — cashiers, clerks, replenishers, all kinds of workers.”_

I would assume that "replenishers" are directly analogous to current Amazon
warehouse employees.

------
massaman
I'm hoping Amazon goes public soon.

~~~
asaph
It's already public. Ticker symbol AMZN.

------
stella_r
I joined Amazon as an SDE 1 in early 2015. I was promoted to an SDE 2 in q4
2016. I just was promoted this year to SDE 3.

Hard work, navigating to the right projects, and managing both upwards and
down... senior and junior people on my part... I feel a bit ripped off. I'm
not sure I would have wanted to get promoted knowing where my comp now falls.

The thing I'm unhappy about is that my target comp isn't actually that much
more than where it already was as an SDE 2.

Without going into specific numbers, what Amazon does is if the stock value
goes up, you only reap the benefits insofar as your existing grants are worth
more. That means if you're above the target comp they assigned you, then you
get no additional stock.

My job role as an SDE 3 has changed. I have more responsibilities and the
influence I built as an SDE 2 has solidified. It's not easy by any means.

I'm going to just a bit longer as there is some initial vest that's wrapping
up early next year... and then I go somewhere else.

My total comp this year is upwards of $250k because of the stock appreciation,
but basically I got shafted with the promo raise. My salary and total comp
didn't increase. I'm just reaping a higher stock price of vested shares.

Edit In response to the article >A warehouse worker hired now at Amazon who
stays until retirement would leave with a fraction of that.

A buddy of mine works at the NYT in a tech role. NYT isn't doing anything
different than Amazon. It takes a lot of nerve to write these kinds of
articles... Hypocrisy at its finest.

~~~
jrmg
_My total comp this year is upwards of $250k, but basically I got shafted_

Only in our industry...

~~~
chii
If the person did 1 mil dollars worth of work, but only got compensated a
quarter of a mil, isn't that getting shafted?

Just because the numbers are bigger, doesn't mean it is less deserving of
being fair.

~~~
mirceal
Nope. You need to make more than you’re paid (on average of course). If this
does not happen it does not make sense keeping you around.

