There’s a reason why now’s a pretty good time to invest in warehouses. The retail apocalypse, which was in full swing before the pandemic, has been accelerated by the coronavirus outbreak. Now, in its wake, a growing number of retailers are closing down stores and shifting their focus to digital sales. As that happens, warehouse demand should increase, an area investors can really look to capitalize on.
But while an uptick in demand might make the case to put money into warehouses, there’s another side of the equation to consider: the social angle. Though warehouses create countless jobs, they’ve been known to lend to working conditions that are far from ideal. And if you’re a socially conscious real estate investor, that could end up being a deal breaker.
Are warehouse workers routinely mistreated?
It’s tricky to lob warehouse workers into a single category, because their working conditions are by no means universal. But through the years, there’s been no shortage of reports highlighting some of the horrors warehouse workers have been subject to: poor ventilation, cramped quarters, and insufficient safety training.
The coronavirus crisis has done a good job of bringing these shortcomings to light. Amazon (NASDAQ: AMZN), in fact, has seen its reputation take a beating during the pandemic due to reports of unsafe working conditions for warehouse employees.
Though Amazon employees receive safety training before being thrust into warehouse environments, that training relates more to logistical safety than keeping safe during a virus outbreak. And there have been numerous reports Amazon did not do enough to prevent workers from getting sick during the pandemic — at a time when demand for online purchases soared.
In fact, Amazon recently made news (and not in a good way) when the National Labor Relations Board determined that its decision to terminate warehouse worker Courtney Bowden violated labor laws. Bowden had been advocating for improved working conditions when the company made the decision to let her go. Similarly, Chris Smalls, a warehouse worker on Staten Island, organized a walkout to protest the lack of protective gear for employees. Smalls was subsequently fired by Amazon as well.
In fact, Amazon has been subjected to dozens of OSHA investigations through the years, and it’s estimated nearly 20,000 Amazon workers fell ill with COVID-19 in the course of their jobs.
But the problem is by no means limited to Amazon. In fact, it’s easy to point a finger at Amazon because of its status as a online retail and shipping giant, but in reality, poor working conditions are a problem for warehouse workers employed by companies large and small.
The Millionacres bottom line
So if you’re going to invest in warehouses, do your research beforehand to get a sense of how well workers are treated. Specifically, you can read up on the number of violations facilities have been slapped with and find out what steps, if any, have been taken to mitigate the problem.
You may also choose to focus on warehouses with state-of-the-art ventilation systems. These make for safer conditions even when there’s not a pandemic at play.
Though there’s a lot of opportunity to make money in warehouse investing, whether by putting money into actual properties or adding industrial REITs, or real estate investment trusts, with warehouse space to your portfolio, make sure your investments align with your personal ethics. There are plenty of ways to succeed in the real estate space without supporting practices that just don’t sit right with you.