Global tax and worker’s fightbacks

6th June 2021

Amazon – what price prime delivery?

The G7 Finance Ministers of the world’s richest nations, meeting in London this weekend, have agreed to a Global Tax Reform programme which will see more revenue being raised from corporations which operate across national boundaries.  

Finance Ministers have agreed the principles of a two Pillar global solution to tackle the tax challenges arising from an increasingly globalised and digital global economy.

Under Pillar One of the agreement, the largest and most profitable multinationals will be required to pay tax in the countries where they operate, not just where they have their headquarters.

The rules would apply to global firms with at least a 10% profit margin and would see 20% of any profit above the 10% margin reallocated and then subjected to tax in the countries they operate.

Under Pillar Two, the G7 also agreed to the principle of at least 15% global minimum corporation tax operated on a country by country basis, with the aim of cracking down on tax avoidance.  The agreement will now be discussed in further detail at the G20 Financial Ministers & Central Bank Governors meeting in July.

The new system is being touted by the UK government as one which will raise more tax revenue from large multinationals and help pay for public services in the UK.

The principle of taxing international corporations more fairly is one which cannot be opposed though whether that means that such corporations will in reality be paying their fair share remains to be seen.  The scope for clever accountants finding loopholes in the declaration of profit margins has yet to be tested.

The basis upon which the profits of these corporations are generated is also open to question, with minimum wages and poor working conditions often being key to maintaining profit margins.  Recent evidence of Amazon workers using bottles and bags, for fear of not meeting targets if they took toilet breaks, are just one example.

Amazon has been the particular focus for debate about unionisation recently.  No Amazon warehouses in Britain for example are unionised.  The Unite trade union has said that Amazon workers should be able to join a union of their choice “without fear”.  The comments follow a case in Alabama in the United States where workers at an Amazon warehouse voted against unionisation.

However, the RWDSU union, which organised the Alabama effort, accused Amazon of illegally interfering in the vote and lying about the implications of unionisation in mandatory staff meetings.

While Amazon denies the claims, it did hire anti-trade union consultants before the ballot.  In September 2020, Amazon had posted two job adverts for intelligence analysts to track labour “organising threats” in the US.  Spanish media reports have also claimed that Amazon had used private detectives to spy on a strike at a warehouse near Barcelona in 2019.

While Amazon had its most lucrative year ever in 2020, helped by a surge in online shopping during the pandemic, it also faced allegations over poor working conditions, as well strikes at warehouses in the US, Italy and Germany.

The Amazon UK workforce reached 40,000 last year and while there are individual trade union members amongst them, there are no recognised union collective bargaining rights at any Amazon workplaces.

Unite executive officer Sharon Graham has written to Amazon boss, billionaire Jeff Bezos, urging him to sign up to a declaration allowing workers the freedom to join a trade union, she wrote,

“Although we do have members in Amazon, workers in your company are not currently free to join a union without fear and without obstruction and propaganda being deployed against them.  So I am asking you to sign up to and abide by the declaration attached, which guarantees British and Irish workers the freedom to talk with and join unions without fear of retribution.”

There is no indication to date that Bezos has responded.

Amazon’s global profits have increased almost 200 per cent from 2019, and CEO Jeff Bezos added £51 billion to his personal wealth during the pandemic. A fulfilment centre employee at Bad Hersfeld, one of Amazon’s German sites, earning €10.40 per hour (£8.95), would have to have worked since around the beginning of the last ice age, approximately 2.5 million years ago, to make as much.

This particular plant does offer some hope however. In 2013 Bad Hersfeld became the first Amazon fulfilment centre in Germany to unionise. Two years later, it was the founding place of Amazon Workers International (AWI), an organisation that has members in 175 fulfilment centres worldwide.

The G7 global tax reform may be the issue which will grab the headlines this weekend but the struggle on the ground, in Amazon and a whole range of other corporations, for better pay, terms and conditions for the workers generating those profits continues.

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