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My Love-Hate Relationship With Amazon Stock

AMZN stock is a great name to own, but I'm sickened by the way AMZN treats its workers

Amazon (NASDAQ:AMZN) is a great company that employs over 647,000 people. Its CEO, Jeff Bezos, is a brilliant strategist and planner. Most importantly for shareholders, AMZN stock has delivered an annualized total return of 29% over the past 15 years. 

Source: Jonathan Weiss / Shutterstock.com

The business media talk about how many billionaires Warren Buffett’s created over the years.  It’s safe to say that Jeff Bezos is responsible for his fair share of people striking it rich, thanks to Amazon’s phenomenal success. 

But it all comes at a cost. 

Businesses Have to Do Better

A recent article in the Guardian about a 48-year-old Amazon warehouse employee who worked at the company’s fulfillment center in Etna, Ohio, reminded me about the dark side of Amazon.

Billy Foister lay on the floor of the Amazon factory for 20 minutes before receiving any medical attention. Foister had a heart attack, lost consciousness, and ultimately died in a hospital. 

“The passing of the employee did not occur at the facility. The employee experienced a personal medical issue (heart attack) and lost consciousness. Several trained team members quickly responded and administered CPR and AED until local emergency responders arrived, within minutes, and took over. The employee was then transported to a local hospital for further treatment, where he was later pronounced deceased,” said an Amazon spokesperson in an email.

The article the describes how another Amazon employee at the same facility died in March of this year after going into cardiac arrest. He was 60 years old. 

In 2017, 57-year-old Thomas Becker had a heart attack while working at an Amazon warehouse in Illinois. Becker died. His widow filed a wrongful death suit against the company, alleging it was careless, negligent, and responsible for Becker’s death. 

“In spite of Amazon’s policy of having its own supposedly qualified medical first responders, not a single Amazon first responder came with a functioning AED [automated external defibrillator] to Thomas Becker’s aid,” Chicago Tribune reported in January. 

The suit further stated that, although the company said there were AED boxes throughout the warehouse, there were no defibrillators inside the boxes.   

Those are three deaths that likely didn’t need to happen. That’s tragic, indeed.

Why Am I Talking About This?

We in the business media, especially those covering stocks, tend to be focused most of the time on the dollars and cents, putting minimal effort into understanding what goes on behind companies’ closed doors. 

I’m as guilty as the next person. 

In April 2017, I called AMZN stock one of the 10 best names to buy for the next decade. Any investor who  listened and bought Amazon stock would have doubled his or her money. 

There’s no question that AMZN stock has been an excellent investment.

However, in the back of my mind, I’ve always wondered if advising investors to buy AMZN stock was ethical. After all, I’d read a lot of stories about how badly Amazon treats its warehouse employees. I even wrote about the subject in  April 2019. 

The article focused on the Amazon Employees for Climate Justice and the pressure the employee group was applying on the company to stop  helping oil and gas companies extract fossil fuels.  But in the article, I warned that the company’s mistreatment of its employees could lower Amazon stock price.

The Bottom Line on AMZN Stock

Everyone can ignore Amazon’s mistreatment of a number of its workers. But if people keep dying of heart attacks in Amazon’s warehouses, eventually bad karma will hurt the company. 

Maybe not today or even next month.  But no bad deed goes unpunished.

Boston Common Asset Management Managing Director Steven Helm wrote an excellent opinion piece in October 2018 about Amazon and its failure to meet Environmental, Social and Governance (ESG) standards.  

“Amazon’s success has come at a high cost. Inhumane scheduling, notoriously long hours, and punishing quotas have made its warehouses resemble sweatshops,” Helm wrote. “In exchange for easy purchase and super-fast delivery of low-cost products, Amazon could be on the verge of creating a ‘race to the bottom’ in working conditions and labor practices as other retailers try to compete with it.”

As more investors focus on investing in ethical companies in coming years, firms like Amazon are going to have to do a much better job of walking the talk. 

If they don’t, the Amazon stock price won’t be hitting $10,000 anytime soon. 

At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.

 


Article printed from InvestorPlace Media, https://investorplace.com/2019/10/my-love-hate-relationship-with-amazon-stock/.

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