A United Nations poverty and human rights expert has sent letters to Amazon, DoorDash, and Walmart, demanding they address allegations that their wages are so low that they trap workers in poverty. Olivier De Schutter, the UN special rapporteur on extreme poverty, also sent a letter to the U.S. government, requesting a response to allegations that the U.S. minimum wage and earnings for workers in the gig economy are so bad that they’re forced to rely on government assistance.
“I am extremely disturbed that workers in some of the world’s most profitable companies—in one of the richest countries on earth—are struggling to afford to eat or pay their rent,” De Schutter said in a statement. “Multi-billion dollar companies should be setting the standard for working conditions and wages, not violating the human rights of their workers by failing to pay them a decent wage.” In 2022, DoorDash reported $6.6 billion in revenue. Walmart reported $572 billion. Amazon reported $514 billion in net sales.
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De Schutter’s letters were sent in August and unveiled this week. The letter to Amazon CEO Andy Jassy, the longest of the three sent to U.S. companies, details allegations that “Amazon pays wages that do not allow its workers and their families an adequate standard of living, shifts the cost of doing business onto the public by relying on public assistance to supplement very low wages, and prevents workers from exercising their right to unionize through intimidation and retaliation.”
Amazon has had one successful warehouse unionization, at its JFK8 Staten Island warehouse last year. Since then, the National Labor Relations Board has demanded Amazon stop firing people for unionizing, and filed complaints against the company for refusing to bargain.
“Amazon has a long history of anti-union action at warehouses,” De Schutter wrote. “This includes constant and continuous anti-union messaging to workers at its “captive audience meetings”, aggressive objection to election outcomes, and a narrative that workers will be better off dealing directly with Amazon rather than through a union.”
In a response letter to the Special Rapporteur, Amazon wrote that it had invested $1.3 billion in wage increases across the U.S., and that its “multitude of jobs and shifts” allowed its workers to have flexible schedules.
“It is our employees’ choice whether or not to join a union. It always has been,” Amazon wrote in the letter. “Globally, Amazon applies or is party to dozens of collective bargaining agreements at national, regional, sectoral, and enterprise levels. We respect and apply the terms and provisions of these collective bargaining agreements. In other situations, we honor and apply existing sectoral agreements but are not a direct party to those agreements.” The letter stated that Amazon “[shares] information on unionization in different ways—through small meetings on paid company time or by being available for questions and conversations as individuals want.”
Motherboard has previously reported on an Amazon unionization effort in Albany, where workers alleged that they were taken off the floor for one-on-one meetings with management. When the union lost the election, it alleged “coercive, threatening, and retaliatory” conduct by the company.
In his letter to the U.S. government, De Schutter wrote that one of the biggest problems workers in the U.S. face is being misclassified as independent contractors. Companies such as Uber and DoorDash pioneered “gig work”, wherein workers are not directly employed by the company, but are instead seen as entrepreneurs who don’t receive the same guarantees and protections as employees.
“The United States has allowed widespread and systematic misclassification of workers as independent contractors, eroding worker protections, leaving workers vulnerable to the whims of private companies, and leading to low pay and unstable work conditions,” De Schutter wrote to the U.S. government. “Loopholes in minimum wage laws leave some workers without protection and with even less pay than the already inadequate minimum wage.”
In some cases, companies argue that because they contract workers through a third party, they are not responsible for their working conditions and are not obligated to bargain. Numerous unionization issues over the past year, including efforts at Amazon delivery stations and Google’s YouTube Music sector, have focused on this point. The workers in turn demand that the company come to the table, because even though they are not its legal employees, it still dictates their working conditions.
In his letter to Amazon, De Schutter wrote that the company intentionally hiring many of its workers as independent contractors “may also contribute to these workers’ incomes being set too low to keep them out of poverty.”
Last week, the NLRB adopted a new rule that broadens the scope of what it means to be a joint employer. This new rule would allow workers to more easily prove that the company subcontracting them through a third party is responsible enough for their working conditions that it is obligated to come to the bargaining table—an argument numerous companies have used to get out of collective bargaining. The rule does not apply to previously filed joint employer claims, however, as it will go into effect in December.
“For example, ‘gig work’ platforms base their business models on classifying workers as independent contractors, a move that shifts the costs and risks that employers normally bear—such as equipment and maintenance, overtime pay, and insurance—to the workers themselves, as well as the public,” De Schutter’s letter to the U.S. government continued.
DoorDash also received a letter from De Schutter, in which he alleged that “DoorDash’s procedures, practices and algorithms lead to many DoorDash workers being paid below the minimum wage, or even the poverty line, leaving them and their families unable to access an adequate standard of living.” Motherboard has previously reported on how DoorDash’s tip-based payment model has left some Dashers begging for extra tips from customers, as they only make around $2 per delivery from the company and are not compensated for gas or travel.
“As a result of classifying workers as independent contractors, unclear algorithms, and unfair tip practices, DoorDash workers are often not paid a living wage, and as a result, many DoorDash workers cannot afford their basic needs,” De Schutter wrote. “DoorDash drivers are not guaranteed a minimum level of pay and may be paid well below what the company advertises, the minimum wage, or even the poverty line.…Despite working full-time for DoorDash, one employee reported that he lives in his car and relies on SNAP [Supplemental Nutrition Assistance Programs].”
Earlier this year, New York City passed a law that would require gig workers like those at DoorDash and Uber to be paid a minimum wage of almost $18 per hour. In his letter, De Schutter noted that “problematically,” DoorDash had “filed suit to stop the wage changes from going into effect.”
In a statement, DoorDash told Motherboard that it had told De Schutter it was working on a response to his requests.
“These allegations fundamentally misunderstand how DoorDash provides economic opportunity and financial security for millions of people who want to earn money when, how, and where they choose,” a DoorDash spokesperson said. “On average, Dashers in the U.S. earn over $25 per hour on delivery, and Dashers globally earned $13 billion last year alone. An overwhelming majority of Dashers consistently say they prefer to remain independent contractors, and it’s because this is supplemental work that enables them to earn extra income.” The spokesperson said that the vast majority of U.S. Dashers were already employed, either full-time or part-time, and did DoorDash as a form of supplemental income.
“If workers reject too many orders, they risk being kicked off the app and losing their income in its entirety, putting pressure on drivers to accept even unprofitable orders,” De Schutter wrote. “Discipline is not transparent and there is no formal appeals process. It could be argued that when apps exert this level of control on workers, the workers should be classified as employees.”
De Schutter also wrote to the U.S. government that the minimum wage of $7.25, which was set in 2009 and has not been adjusted for inflation, “leaves many full-time workers unable to fulfill their basic needs and gives many full-time workers no choice but to rely on social safety nets to survive.”
“Those earning the federal minimum wage and even higher state minimum wages may not be
able to afford living expenses in the United States,” De Schutter wrote. He noted that based on the U.S. Bureau of Labor Statistics’ definition of “working poor,” meaning individuals that make less than $14,580 per year, around 6.3 million people were classified as working poor in 2023. They comprise around 4.1% of U.S. workers, De Schutter wrote.
De Schutter’s letter to Walmart asserted that “wages at Walmart are reportedly so low that some workers often have to rely on government benefits including food stamps and health coverage for low-income individuals…The fact that incomes of thousands of its employees are so low that they qualified for government benefits means that Walmart is transferring labor costs from itself to the public.”
His letter alleges that, “Walmart has deliberately retained more part-time workers, contributing to more low-paid work.” He also demanded answers from the company about its “pervasive labor rights abuses” and “long track record of discouraging union organizing efforts.”
In a statement, a Walmart spokesperson told Motherboard that, “We disagree with the assertions in the letter. Walmart’s employment and wage information is both widely reported on and publicly available, and we have a proven record of creating opportunity for millions of associates across the world and a deep respect for human rights. We are engaging directly with the UN Special Rapporteur.”
De Schutter’s letter to the government stated that “the United States has turned a blind eye to the union suppressing and retaliatory actions of powerful corporations, allowing them to steamroll employees into accepting poverty wages while the corporate revenues skyrocket.”
