▶ Click here for a larger view
Investors’ attention is focused on the stock price movements of related stocks listed on the New York Stock Exchange as winds blow to establish trade unions in so-called ‘big tech’ companies such as Starbucks, Amazon, and Apple in the United States. Local labor-management experts pay attention to the fact that the wind to establish a union is blowing in the US job market after the COVID-19 pandemic, and the wind is blowing in the U.S. job market, and this change is centered on large technology companies. Recently, related big tech stock prices seem to be on the decline due to labor-management risks, the Corona 19 pandemic from China, the supply chain disruption and inflation that occurred after Russia’s invasion of Ukraine, and the speedy battle of central banks’ rate hikes.
Local media, including Axios, announced on the 25th (local time) that the U.S. Labor Relations Board (NLRB) had accused Starbucks of obstructing union formation. The reason is that the company took unfair retaliation, such as disciplinary action and dismissal, against three workers who led the establishment of the union.
As of the 25th, Starbucks stock has fallen about 35% this year. Compared to the 19% decline in the Nasdaq 100 during the same period, the decline is striking. The Nasdaq 100 is a stock index composed of 100 large technology and blue-chip stocks among companies listed on the Nasdaq Stock Exchange such as Starbucks, Apple, Microsoft (MS), Alphabet, and Amazon.
The steep decline in Starbucks stock price was attributed to the supply chain disruption and a sharp rise in the price of green coffee beans, which hampered corporate profit growth. However, the main reason for the downtrend is that since the end of last year, labor unions were established one by one at each local store, and labor-management conflicts arose over this. Earlier on the 22nd, a vote to form a union was passed at a Starbucks store in Falls Church, Virginia. If approved by the NLRB, the branch will become the sixth union store in Virginia. On the same day, Starbucks employees in Twin Falls, Idaho, sent a letter of application to CEO Howard Schultz to form a union.
The first union was formed in December of last year at Starbucks, which has been running for about 50 years without a union. At that time, after a union was formed at a store in Buffalo, New York, more than 200 stores in Arizona and other regions started to form a union one after another. Until recently, a total of eight stores had been approved by the NLRB to form a union. After the wave of union formation, Starbucks changed its CEO. Earlier this month, Schultz, who is called the ‘father of Starbucks’, returned to the CEO position as a relief pitcher. After taking office, Schultz held an online forum with store representatives in the U.S. to expand employee welfare benefits, but to exclude unionized stores. Starbucks workers have been protesting after Schultz returned to the role of CEO, saying the company was interfering with the voting to form a union and firing employees who formed the union.
As a result of this situation, the number of short sellers betting on the decline of the company’s stock price has also increased. As of the end of March, the ratio of short selling to the total number of stocks in circulation was low at about 1%, but the number of short-sold stocks totaled 12.12 million, an increase of 17% from the previous month.
This movement to establish a union is spreading to technology companies such as Apple, Amazon, and Blizzard, which used to be a ‘non-union management policy’. The employees of Apple’s flagship store (experience store) at Grand Central Terminal in Manhattan, New York, have recently started to sign for union formation. If the union is formed, it will be the first union store among 270 Apple stores in the United States. According to the Washington Post (WP) on the 16th of this month, union formation is being promoted at at least three branches in addition to the Grand Central Terminal branch. Apple is said to have been persuaded for months to stop the union.
Amazon is also about to set up its first union in history. The NLRB announced that as a result of the union establishment vote held on the 1st of this month at ‘JFK8’, the largest Amazon warehouse in Staten Island, New York City, more than half of the votes in favor of the establishment were about to be established. Another New York-based warehouse worker is also seeking to form a union. Amazon’s share price has fallen by about 13% in the last month (March 25-April 25) when the issue of union establishment became a reality. The drop was larger than the Nasdaq 100 Index (down about 10%) during the same period. Investors tend to sell their stocks, believing that forming a union will reduce the profitability of the company. Meanwhile, investment bank UBS this month lowered its target price for Amazon from $4625 to $4,550. From the end of last month, BNP Paribas began to present an investment opinion on Amazon for the first time, and offered an evaluation of ‘below market return’ and a target price of $2,900.
“The union establishment movement centered on tech giants these days will be a monumental movement comparable to the automobile union establishment movement 100 years ago,” said Eric Loomis, an associate professor at the University of Rhode Island, a labor expert. The reason why companies are encouraged to establish unions is because of the ongoing labor shortage in the job market. Nelson Lichtenstein, a professor at UC Santa Barbara, said, “Unlike Wal-Mart, Amazon has a large logistics center in a location with high accessibility near large cities, so it is easy to change jobs and workers have high bargaining power.”
However, given that the wave of union establishment is affected by political events such as the ‘midterm election’, there is a forecast that the market atmosphere may change after the midterm election in November of this year.
[김인오 기자]
[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]
