Some Amazon Workers Fear They’ll Earn Less Even With a $15 Minimum Wage

When Amazon announced Tuesday that it was raising its minimum wage to $15 an hour for all employees, even vocal critics of its labor practices like Senator Bernie Sanders praised the company. The retail giant’s decision will undoubtedly put more money into the hands of its workers—especially the some 100,000 temporary US employees Amazon plans to hire in the coming months for the holiday season. But some Amazon workers, including one who spoke with WIRED, think they will earn less under the new policy—even though they are receiving an hourly raise.

The reason is that in addition to raising wages, Amazon is also slashing some performance bonuses and its restricted stock unit program. In total, workers say losing the benefits may amount to thousands of dollars in lost pay annually. The median salary for Amazon employees in the US, including stock and bonuses, is $34,123, according to the company. (That figure takes into account white collar workers at Amazon’s Seattle headquarters.)

During the holiday season in particular, the soon-to-be cut bonuses can be worth upwards of $300 per month, says the employee WIRED spoke with. “The timing of this; I don’t think it’s that much of a coincidence,” says the worker, who is employed at an Amazon fulfillment center on the East Coast. “November and December were the months where they would double the attendance and productivity bonuses.” (WIRED is granting the worker anonymity to protect them from reprisal from their employer.)

It’s not just bonuses that are being cut. Amazon is also ending its lucrative restricted stock unit program (RSU), which allows employees to vest stocks in the company after two years. In recent years, Amazon has steadily decreased the number of RSUs it has given employees as its stock price more than doubled. Warehouse workers were typically given several RSUs per year, though the number has shrunk as Amazon’s shares have soared in value, according to the employee.

Amazon said in its blog post announcing the $15 minium wage that it was choosing to phase out RSUs because “we’ve heard from our hourly fulfillment and customer service employees that they prefer the predictability and immediacy of cash.” The company says it will replace the program with a direct stock purchase plan before the end of next year and that hourly raises are meant to help compensate for the loss in RSUs. But Amazon has still been vague about how it plans to account for the lost productivity bonuses, which leaves some workers worried.

“There are a lot of people who are upset,” says the Amazon worker. “[Employees] got a bigger raise, but it still didn’t make up for the shares plus the bonuses.”

There is also still confusion about whether Whole Foods employees, some of which are reportedly trying to form a union, may still be offered an equity program, according to Gizmodo. (Amazon acquired the high-end grocery chain last year.)

Amazon disputes that any employees will make less as a result of the RSU program and incentive bonuses being cut. “The significant increase in hourly cash wages more than compensates for the phase out of incentive pay and RSUs,” a spokesperson for the company said in a statement. “We can confirm that all hourly Operations and Customer Service employees will see an increase in their total compensation as a result of this announcement. In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable.”

The employee who spoke with WIRED maintains they will lose at least $1,400 per year as a result of the benefits being cut, despite factoring in a $1 raise in hourly pay. When WIRED provided Amazon with the employee’s calculations, the company did not dispute their accuracy.

In one sense, Amazon has good reason to cut the benefits it previously offered and instead provide employees with more cash. One of the soon-to-expire bonuses, for example, was given based on whether an employee’s entire warehouse met its productivity goals—a factor no single worker can control. RSUs also aren’t vested for two years; many warehouse employees don’t work at the company long enough to claim them, causing millions to be forfeited each year.

“It’s not fair to offer [Amazon workers] compensation that most of them won’t get,” says Valerie Frederickson, the CEO and founder of Silicon Valley human resource firm Frederickson Partners. “In a way, it’s false compensation.”

But raising hourly wages and cutting the aforementioned benefits may still hurt some Amazon workers—particularly those that perform well at their job and have stuck around long enough to claim equity in the company. Amazon’s new compensation structure appears designed more to attract new employees in today’s tight labor market, rather than to keep loyal workers at the company for longer. After all, in the next several weeks, Amazon will need to begin competing against other retailers who are also hiring extra holiday season help.

Amazon likely also raised its minimum wage to stave off criticism from politicians like Sanders, who last month introduced legislation literally called the Stop BEZOS Act, which is designed to hold large employers financially accountable when their low-wage workers need to rely on public benefits like food stamps to make ends meet. The bill was introduced after Amazon spent months responding to negative reports about its grueling low-wage labor practices.

By raising wages, Amazon may also be attempting to ensure its employees don’t choose to collectively organize. Late last month, Gizmodo published excerpts from a training video the company distributed to Whole Foods managers that appears to teach them how to identify and dissuade employees who may be forming a union. Amazon workers have also repeatedly tried to organize for years. But by introducing a compensation structure that could hand some long-term employees the short end of the stick, Amazon’s plan to cool the desire for collective bargaining may have backfired.


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Could spies actually insert malicious chips into computer circuit boards? A manufacturing expert says it’s possible

Could Chinese spies covertly insert malicious chips into computer circuit boards sold in the United States to the military, Apple, and Amazon?

It’s a wild possibility to think about — but that’s exactly what Bloomberg reported in a deeply reported investigative story this week. It claimed that a supplier named SuperMicro, which manufactures the motherboards, was infiltrated by the spies several years ago.

Muddying the waters, all parties involved vigorously deny the report even as Bloomberg stands by its reporting. Amazon said the inaccuracies are “hard to count.” Apple published a rare 750-word statement in response, calling the report untrue.

It’s not surprising that the situation is unclear. The story touches on matters of international spying, high-tech manufacturing, and the world of information security — three of the most secretive realms in the entire world.

Ultimately, we may never know with a high degree of certainty what actually happened in the past three years, in regards to SuperMicro’s supply chain.

But according to one high-tech manufacturing expert, it’s entirely realistic to think that one bad actor could change the design on a circuit board, and that it wouldn’t be caught until the finished product is out in the wild.

“There’s so much complexity in these products,” Anna-Katrina Shedletsky told Business Insider in a phone interview. “I think what’s really great about that Bloomberg GIF that’s the top of that at the top of their article.”

“See how tiny that chip is? There’s no way human inspector is going to notice that there when it wasn’t supposed to be. Even the engineer who is intimately familiar with the layout of that design may not notice that,” she continued.

Shedletsky would know about detecting issues in contract manufacturing. She’s a cofounder of Instrumental, a company that uses machine learning to head off manufacturing defects, and she estimates she’s spent 500 days in factories in China and around the world, first as a product design engineer at Apple for six years, and later in her role as Instrumental’s CEO.

“I think based on the methodology in which these parts are designed and manufactured, whether it’s a nation-state actor or even just someone else, I don’t actually think it’s hard to inject stuff that the brand or design team didn’t intentionally ask for,” she said. She believes that easily searchable, high-resolution digital photos of circuit boards, one Instrumental’s main products, will become increasingly important as companies implement more controls on the supply chain.

All electronics have a circuit board

Instrumental cofounders Anna Shedletsky and Sam Weiss.
Instrumental

Shedletsky doesn’t have any direct knowledge about the Bloomberg report or how SuperMicro does its manufacturing, and doesn’t know what to think given the strong and detailed denials provided by the companies involved.

“I don’t know what to believe, but at the same time it doesn’t really matter, because it’s possible, and we have to act like it is true to solve the problem,” she said.

After all, Bloomberg alleges that spies were able to put an unwanted chip on a printed circuit board. All electronics have a circuit board in them, she said. And often, one person can change the computer file that has the design.

“The manufacturer doesn’t even need to be nefarious,” she explained, speaking generally. “You just need one person who is going to change the reference design and hit save. Now it’s going to go on any customer that pulls that reference design, for something like a server that’s pretty generic.”

These parts go through an inspection before they’re packed and shipped, but these kind of inspections aren’t set up to detect things that have been added — they’re often more concerned with common issues like whether the solder was properly applied. And if the design document was altered, then these tests wouldn’t pick it up either.

“It would be very easy to get by one of those tests. Those tests are based on what’s called the ‘Gerber file’ or the computer aided design of what’s supposed to be on the board,” she explained.

One problem that has come up in her experience is counterfeits. Sometimes, she said, factories can replace one chip on a circuit board with cheaper, counterfeit alternatives and the company that built the product doesn’t realize until it’s shipping.

Reuters Pictures Archive

“A friend of mine built a product and their batteries started smoking,” she said. “The root cause was that the power chip was a cheaper version that was not on the design. It had less circuitry, but it looked like a power chip and kind of functions like one, but it was a ‘cost-down’ model, like it was a cheaper chip.”

There’s also a range of different levels of security at different factories, she said. In some, everything is locked down and controlled. At others, circuit boards and other parts are seen as less critical than stuff like the enclosures, which can be considered super-secret.

In general, though, she doesn’t worry about consumer devices like smartphones from big, well-resourced brands like Apple being vulnerable to hardware attacks like the one Bloomberg alleges — there are simply too many people looking at the design and finished product.

But that still leaves a lot of vulnerable products out there.

“Even regardless of whether it’s true or not, if you were a SuperMicro customer for the last four years, five years you might be thinking, ‘do any of our server boards have problematic stuff going on?'” Shedletsky said. “I would be asking myself if I was a customer. Because it’s so plausible, there could be more we don’t know about.”

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Mega Millions results for 10/05/18; did anyone win the $420M jackpot?

Posted October 06, 2018 at 09:27 AM | Updated October 06, 2018 at 09:27 AM

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JBS sued by Kentucky woman over ground beef in salmonella recall

By P.J. Huffstutter

CHICAGO (Reuters) – A Kentucky woman is suing the U.S. arm of Brazil’s JBS SA, alleging she was hospitalized after consuming ground beef produced by the company that was tainted with Salmonella, according to a lawsuit filed on Friday in Arizona state court.

The lawsuit comes one day after the U.S. Agriculture Department’s Food Safety and Inspection Service (FSIS) announced that JBS Tolleson Inc was voluntarily pulling 6.5 million pounds of ground beef and other raw beef products that had been shipped to stores across the country. JBS Tolleson is part of JBS USA, the U.S. arm of the world’s largest meatpacking company.

The meat had been processed through JBS’ Arizona plant, the USDA said. The agency later updated the volume of beef products being recalled, to 6.9 million pounds.

JBS USA could not be immediately reached for comment on Friday.

The complaint, filed in Superior Court of the state of Arizona in Maricopa County, said Dana Raab bought the JBS-produced ground beef from Sam’s Club in September and made meat loaf with some of it before freezing the rest.

Raab later fell ill, tested positive for Salmonella Newport, and was hospitalized for five days due to severe dehydration and a blocked bile duct, the complaint said.

Salmonella can cause fever, diarrhea and abdominal pain, and can be fatal to young children, the elderly, and people with compromised immune systems.

U.S. investigators have identified at least 57 people in 16 states who have become ill due to consuming contaminated ground beef products made from meat traced back to JBS, USDA said.

“I expect that number is going to go up, because one of our clients is from Nevada – and the health department there has told him he is one of more than 200 people they’ve identified as being part of this outbreak,” said attorney William Marler, who is representing Raab.

Officials from the Nevada Department of Health and Human Services did not immediately return calls for comment on Friday.

The USDA had alerted JBS Tolleson Inc’s president Andre Noqueira in 2017 that there were problems at the Arizona plant, according to a USDA document and the Raab lawsuit. Federal inspectors in 2017 accused Noqueira of enabling “egregious” and “inhumane” livestock practices, according to the lawsuit.

“Officials found two ‘mentally incoherent’ cows laying on their side and ‘moaning as if in pain’,” the complaint said. “The inspector asked for the cows to be euthanized but one died in its pen before it could be put down.”

Federal inspectors deferred taking action against the company, according to the USDA document.

(Reporting By P.J. Huffstutter; editing by Caroline Stauffer)

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‘Despondent’ Musk’s Tesla resembles Lehman, Greenlight’s Einhorn says

NEW YORK (Reuters) – Hedge fund manager David Einhorn lambasted Tesla Inc (TSLA.O) and its “despondent” Chief Executive Elon Musk on Friday, comparing the electric car company to Lehman Brothers Holdings Inc, where he had flagged accounting problems several months before its 2008 collapse.

FILE PHOTO: David Einhorn, President of Greenlight Capital, Inc., presents during the 2018 Sohn Investment Conference in New York City, U.S., April 23, 2018. REUTERS/Brendan McDermid

“Like Lehman, we think the deception is about to catch up to TSLA,” Einhorn’s firm Greenlight Capital, which has sold Tesla shares short, said in a quarterly investor letter obtained by Reuters. “Elon Musk’s erratic behavior suggests that he sees it the same way.”

Greenlight’s letter came one day after Musk, a longtime critic of short-sellers, appeared to taunt the U.S. Securities and Exchange Commission by calling it the “Shortseller Enrichment Commission” on Twitter.

That came just five days after Musk settled SEC fraud charges, in an accord that lets him remain Tesla’s chief executive but requires he step aside as chairman. A judge has yet to approve the settlement.

Tesla did not immediately respond to requests for comment. Its shares were down 7 percent at $262.05 in late afternoon trading.

Greenlight is having a difficult year, with its main fund down 25.7 percent through September, but said its Tesla short position was its second biggest winner in the third quarter.

In an investor presentation in May 2008, four months before Lehman went bankrupt, Einhorn had questioned the investment bank’s accounting, including for real estate, and said it needed to raise large amounts of capital.

Einhorn said Tesla has “many parallels” to Lehman, which he said “threatened short sellers, refused to raise capital (it even bought back stock), and management publicly suggested it would go private.”

“Months later, shareholders, creditors, employees and the global economy paid a big price when management’s reckless behavior led to bankruptcy,” Einhorn said.

He said a big problem for Musk is that Tesla would lose too much money targeting a mass audience by selling its Model 3 at a $35,000 starting price, and yet “can’t bring himself” to cancel the program and refund customer deposits.

“His conduct suggests that he is doing his best to be relieved of his position as CEO to avoid accountability,” Einhorn said.

Musk, for his part, has used Twitter to mock Einhorn, saying on Aug. 1 he would “send Einhorn a box of short shorts to comfort him through this difficult time.”

Greenlight said it also sold its last Apple Inc (AAPL.O) shares in August at $228 per share, eight years after buying the iPhone maker at less than one-sixth that price, on growing fear of “Chinese retaliation against America’s trade policies.

Apple did not immediately respond to a request for comment. Its shares were down 1.4 percent at $224.71 late Friday.

Reporting by Jennifer Ablan and Jonathan Stempel; Editing by Tom Brown and Marguerita Choy

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Bubble trouble? Seltzer maker LaCroix sued over ‘all-natural’ label

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A lawsuit popped open this week in Chicago accuses the popular sparkling water brand LaCroix of lying about its “all-natural” ingredients.

The filing in Cook County, Illinois, circuit court, on Monday against the National Beverage Corporation, LaCroix’s parent company, by the law firm Beaumont Costales LLC on behalf of plaintiff Lenora Rice.

“Much of LaCroix’s popularity stems from the American consumer’s perception that LaCroix water is ‘all natural,’ or otherwise comprised entirely of natural substances,” reads a copy of the complaint obtained by NBC News. “Unfortunately for all parties involved, Defendant’s representations regarding the naturalness of LaCroix water are false.”

Image: LaCroix Sparking Water
LaCroix Sparking Water on display during Hilarity for Charity’s 5th Annual Los Angeles Variety Show: Seth Rogen’s Halloween at Hollywood Palladium on Oct. 15, 2016 in Los Angeles, California.Randy Shropshire / Getty Images

The lawsuit claims LaCroix uses a number of synthetic ingredients, including ethyl butanoate, limonene, and linalool propionate.

The lawsuit then goes on to claim that the company has not only mislabeled its products, but contains ingredients that are used for other purposes like linalool, which the suit claims is used in insecticides.

All three ingredients are in fact naturally occurring in fruit. Ethyl butanoate is found in natural fruits, including apples and tangerines, according to the chemistry database PubChem maintained by the National Institutes of Health. Linalool and limonene also occur naturally in fruit. They help give citrus peels their distinctive aroma.

In a statement published online, the law firm says it wants LaCroix to relabel its packaging and award damages to customers who bought the beverages thinking it was “all-natural.”

The National Beverage Corporation strongly refuted these allegations in a statement saying they were made “without basis in fact or law.”

“Natural flavors in LaCroix are derived from the natural essence oils from the named fruit used in each of the flavors,” the company wrote, citing the United States Food and Drug Administration’s definition of “natural.”

“There are no sugars or artificial ingredients contained in, nor added to, those extracted flavors,” seltzer the company said.

The company said it will be seeking damages resulting from the publication of the lawsuit’s allegations.

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Mattress Firm files for Chapter 11 bankruptcy protection, will close up to 700 stores



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The mattress manufacturing and retail industry is having its share of nightmares over upheaval from online-based retail disruptors, and scandal within an industry giant.
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Mattress Firm, which has been grappling with declining sales amid an overexpansion and a scandal at its parent company, filed for Chapter 11 bankruptcy protection Friday.

The Houston-based retailer has been ailing amid a surge of bed-in-a-box online retailers, too many physical stores and an accounting mess at its parent company, Steinhoff International.

Mattress Firm plans to close as many as 700 of its 3,230 stores. Those stores are located “in certain markets where we have too many locations in close proximity to each other,” Mattress Firm CEO Steve Stagner said in a statement.

About 200 will close within days. The company has nearly 10,000 employees.

“We intend to use the additional liquidity from these actions to improve our product offering, provide greater value to our customers, open new stores in new markets, and strategically expand in existing markets where we see the greatest opportunities to serve our customers,” he said.

Mattress Firms said in a court filing that it will not conduct typical going-out-of-business sales, where customers might score a deal.

Instead, it will transfer mattresses to other stores, warehouses or distribution centers, or could “decide to abandon” showroom products, according to a court filing.

In Chapter 11 bankruptcy, retailers typically try to get out of expensive leases and slash debt to have a better chance of surviving profitably.

More: There’s a fierce battle over your bed: Industry goes to the mattresses

More: Mattress Firm is ‘conspiring’ to sell bogus mattresses, Tempur-Pedic alleges in lawsuit

More: With Mattress Firm reeling, Serta Simmons merges with bed-in-a-box company Tuft & Needle

The retailer ballooned in size in recent years through a series of acquisitions – Mattress Giant in 2012, Sleep Train in 2014 and Sleepy’s in 2016.

It was too much, too fast.

The company has since closed hundreds of locations, seeking stability amid upheaval in the mattress market.

Rebranding all of its stores as Mattress Firm worsened the retailer’s troubles. In a court filing, the company also acknowledged “several well-intentioned, but ill-advised, marketing and sales promotions” in 2017 and 2018.

Mattress Firm expects to lose $150 million in its 2018 fiscal year after making a profit before earnings, taxes, interest and depreciation of $251 million in 2017.

Overexpansion is at the heart of the industry’s troubles. There are now more places to buy a mattress in the U.S. than places to buy a Big Mac.

Mattress Firm filed for bankruptcy in a federal court in Delaware. The company said it had secured enough support from secured lenders to stay in business, but a federal judge must approve with the company’s restructuring plan, which is not guaranteed.

The case could have significant collateral damage:

Landlords that bet big on Mattress Firm’s expansion will be left with empty stores.

Mattress makers could face huge losses. Mattress Firm owes Serta Simmons Bedding alone more than $90 million, according to a court filing. Serta Simmons representatives had no immediate comment.

Serta Simmons last year won a contract to supply Mattress Firm after rival mattress maker Tempur Sealy International had a falling out with the retailer. But sales have since disappointed.

Competitors could face a flood of cheap mattresses. If the company can’t survive bankruptcy, enormous disruption would ensue.



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If you’re shopping for a new mattress, make sure to keep these 4 tips in mind.
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Bed-in-a-box sellers like Casper and Leesa have surged in recent years, offering free trial periods, free delivery and easy ordering. 

“I think Casper is the reason why they are in this position,” Casper CEO Philip Krim said Friday. “Casper has really pushed the industry to reinvent itself. We continue to give the customer what they want, and that’s not how the incumbents in this space operated.”

Krim said Mattress Firm needs to “make some big changes,” but he doubts it will happen.

“I think they’re going to try to hide the fact that they’re going through this process from consumers as best they can,” he said. “It’s hard for them to change the way they operate.”

Online retailers could capitalize in the long run. But online mattress makers are facing their own problems, including steep discounting, intense marketing and the threat of Amazon out-muscling them.

About 10- to 12 percent of mattress sales are online, Krim estimated. He said it would likely double within a few years.

Meanwhile, Casper plans to open more than 200 stores within the next three years. Leesa is also expected to open stores.

Mattress Firm has its own bed-in-a-box offering, but Krim said it “has not impacted us.”

“Candidly, it’s not a great product,” Krim said. “If anything, it’s helped us because it validates to the market that bed-in-a-box is here to stay and it’s a great way to buy a mattress.”

Complicating Mattress Firm’s situation is a scandal at Steinhoff, a global conglomerate that has acknowledged accusations of “accounting irregularities,” including an overstatement of how much cash it had. Steinhoff sells more than 40 brands throughout the world in areas such as household goods, clothing and automotive dealerships.

Asked for comment, Steinhoff referred to a statement by CEO Danie van der Merwe: “Mattress Firm has been facing significant operational challenges which management is addressing through its turnaround plan” and bankruptcy “is the best way to support and accelerate the turnaround plan so as to ensure a future for Mattress Firm and its employees and unlock value for shareholders over time.”

Mattress Firm told a federal judge in a court filing that Stagner’s turnaround efforts since being appointed as CEO March 1 have begun to bear fruit. The company said it’s focusing on improving advertising, “financial accountability,” “a rewarding in-store customer experience,” better products and an upgraded e-commerce offering.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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