Apple is continuing its push to keep its vast network of retail stores from unionizing, looking to avoid the unionization issues experienced by companies like Amazon and Starbucks.
Mark Gurman for Bloomberg News:
Over the past two weeks, managers at Apple’s roughly 270 US retail outlets held meetings with staff members to discuss the risks of unionization and provide a planned update on bargaining between the company and the first unionized store, a location in Towson, Maryland.
The talks, held during gatherings known as Daily Downloads, followed a bit of a lull at Apple. Months ago, the company held Q&A and information sessions aimed at addressing unions and its retail chief sent a video to staffers on the topic.
The efforts have so far appeared to work: Only two Apple stores have unionized — Towson and Oklahoma City — and locations that sought to organize workers in Atlanta and St. Louis have walked back their efforts… Managers told workers that the union representing Towson employees — International Association of Machinists and Aerospace Workers, or IAM — is requesting dues that amount to 1.5% of pay. Managers said that amount of money could quickly add up over time and that employees who don’t comply with the payment could be terminated within a month, based on the union’s proposals.
Managers also said the Towson store is giving more priority to full-time employees who want to take weekend days off, putting part-timers at a disadvantage. Similarly, they warned stores that longer-tenured employees at the Towson outlet would be prioritized over new staffers for jobs.
MacDailyNews Take: As we wrote back in February:
In a free market, jobs are valued by supply and demand.
The skillset for a retail employee is different than that for, say, a software engineer. Potential retail employees are an order of magnitude more plentiful than software engineers and the wages paid and benefits granted for each job reflect that discrepancy.
You’re not going to get rich working in retail. There are simply too many other people capable of doing your job.
Nobody likes to hear that their job is a dime a dozen. Regardless, retail jobs are a dime a dozen.
If retail workers unionize, they can, and do, force abnormal wages and benefits that do not reflect the reality of supply and demand for such positions.
What happens next (besides backroom graft and corruption between union bosses and politicians)?
The corporation is forced to overpay unionized staff to do tasks that, in a free and unfettered market, should cost the company far less. Therefore, to maintain margins and profitability (in order to satisfy the company’s shareholders and the market), the company is forced to either cut back in other areas or raise prices for goods and services. The company cannot “absorb the cost” longer term.
Talk about inflation.
That said, yes, executive compensation is out of whack. Tim Cook is vastly overpaid for what he does. This is because he holds a rare skillset and it benefits the shareholders to have continuity in the CEO position. Basically, Apple overpays Tim Cook in order to have a long-term CEO which provides confidence to the market. A succession of different CEOs jumping from company to company every other year seeking higher salaries would be a negative and justifies Cook’s overpayment. Cook is paid to stay more than for what he actually does. This is why he has vesting targets set years into the future. If he stays, providing continuity, he benefits and so does the company’s stock price (over time).
Not so for retail employees. If one leaves, there’s an endless line of others to replace them. Sure, there are excellent retail employees and, if Apple’s retail arm is functioning properly, they are being identified and rewarded in order to keep them, as their continued employment benefits the company, the company’s customers, and the company’s shareholders. But the cost of their employment must make financial sense, regardless of how good an employee is – if it costs more to keep them than they are worth to the company, they should seek employment elsewhere, not force overpayment / continued employment.
If Apple is not functioning properly, unionization is the last resort of employees. Just know that those costs will eventually be passed to the customer. Someone has to pay. There’s no such thing as a free lunch. If those unionization costs are too high (which they tend to become over time), it will hurt the company (consumers will look for similar goods and services offered at significantly lower prices) and the retail workers will eventually feel negative effects from that (see: unions and Detroit’s automotive industry, what’s left of it).
Back in the day, unions corrected many wrongs: unsafe working conditions, forced overtime without pay, child labor, etc. None of these situations are faced by Apple Retail employees today. Some retail staffers simply want higher pay than the actual value of their work in a free market, so they want to band together to force it.
In many union settings, workers face limited advancement based on their merits. Union workers’ avenues for advancement are limited as stipulated by union contracts. So, if you are an exemplary Apple employee today, your prospects are likely brighter than if you were part of a union, subject to certain union rules governing advancement, etc. Retail employees should carefully consider the pitfalls of unionization and the consequences of unintended consequences.
Apple should do all it can, within reason, to satisfy and compensate retail employees. In fact, Apple appears to be doing so. Just this February, Bloomberg News reported that Apple will significantly increase wages and benefits for American retail workers amid a tightening labor market.
Apple adopted the following changes for U.S. retail workers beginning on April 4th [2022]:
• Raises ranging from 2% to 10% depending on store location and role, for salespeople, Genius Bar technical support staff, and some senior hourly workers.
• Doubling paid sick days for both full-time and part-time workers. The days can be used for mental health leave and taking family members to the doctor. This change will give full-time workers 12 paid sick days, instead of six.
• Workers receive more annual vacation days, beginning at three years of employment instead of five.
• Part-time employees will now get as many as six paid vacation days for the first time. Another first: They’ll get paid parental leave. That benefit will cover up to six weeks and will include the ability to gradually ramp up work time for the first four weeks back.
• Part-time workers also will get access to discounted emergency backup care for children or elderly family members.
In a [2022] statement to Bloomberg News, an Apple spokesperson reiterated, “We are pleased to offer very strong compensation and benefits for full time and part time employees, including health care, tuition reimbursement, new parental leave, paid family leave, annual stock grants and many other benefits.”
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