Careening around the corner comes the busiest time of year for retailers: the holidays. Faced with a tight labor market and historic unemployment rate, it seems some big bosses are emulating Santa Claus and handing out pre-season surprises.
Jeff Bezos, the wealthiest man on the planet, is now finally sharing the riches with his employees at Amazon by raising the company’s minimum wage to $15 an hour.
Bezos earns $4,474,885 an hour – $231,000 per minute – which is approximately 157 times the $28,466 median annual salary at Amazon. But Bezos did not come to the decision alone; he caved to pressure.
The Truth Hurts
Report after salacious report has exposed the exploitation of Amazon’s workers, including low wages, lack of scheduled breaks, no time off during peak seasons, and being forced to work while injured.
Now that’s in-your-face guerrilla warfare.
Bezos’ perceived lack of humanity had Senator Bernie Sanders (I-VT) so riled he introduced a bill in September that, in its simplest form, called for taxing employers like Amazon to assist employees who needed Medicaid and food stamps. Sanders named the bill “Stop Bad Employers by Zeroing Out Subsidies Act,” or the “Stop BEZOS Act.”
Now that’s in-your-face guerrilla warfare. Do you feel the Bern, Jeff? Senator Sanders denounced Bezos as “the wealthiest person on Earth because many of his Amazon employees earned wages that were so low that they were forced to go on government programs like food stamps, Medicaid and subsidized housing.”
It worked, and now Amazon is crowing about their landmark decision. As Bezos said in a statement: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.”
The wealthy businessman, it seems, is on a mission to turn around his public image.
To say Bernie Sanders was prone to uncontainable giddiness is quite the understatement:
“Today I want to give credit where credit is due … Today he has raised the minimum wage at Amazon and Whole Foods effective next month. This applies not only to full-time workers, but part-time workers and temporary workers as well … Let me thank the many hundreds of Amazon workers who contacted my office and the Fight for $15 movement which has been leading this effort for years.”
What might have happened had Bezos not caved to Bernie’s pressure? Well, his people were preparing for an uprising. And he has a sense of self-righteous audacity to challenge the big box stores to follow his lead? Seriously, it’s as if he came to the $15 decision all by his lonesome.
But we all know the Fight for $15 movement predates Bezos’ public relations nightmare. And now he is embracing the concept and pledging to lobby the federal government to increase the minimum wage to $15 nationally.
Does It Make Sense?
Aside from moving closer to a livable wage for many of Amazon’s baseline earners, do minimum wage increases help or hurt the working stiff? Perhaps the answer is a double-edged sword.
According to Liberty Nation’s Andrew Moran, when Ontario Province in Canada raised the national minimum wage to $14 an hour, it sparked a swift reaction within the market: “job cuts, price hikes, and benefit clawbacks.” In other words, unintended negative consequences abounded.
One such side-effect is the increasing use of automation to replace workers. Moran also notes that an increase in the wage brings additional labor, as supplementary jobs are eliminated. When faced with a mandated increase, the Red Robin restaurant chain whacked their busboy program, which they believe will offset rising wages – to the tune of an additional profit of $8 million this year. But will they lose in the areas of customer satisfaction and retention? .
…public scorn is a mighty humbler of the ego.
The minimum wage is set by the Fair Labor Standards Act, and requires most employers to pay workers the highest minimum wage prescribed by federal, state, or local law. Since July 24, 2009, the nationwide minimum wage of $7.25 per hour is the mandate. An increase, by most standards, is warranted.
But more than double the wage is a foolish decision.
On the flip side, improvement in response to public pressure within the marketplace is a good thing. Left to their own devices, without a hard and severe challenge to rise, companies like Amazon won’t evolve. Why? They want to retain higher profits. But just as Jeff Bezos has learned, public scorn is a mighty humbler of the ego.
Let the titans of industry go to battle against public opinion. Let them pave the way through good deeds and epic Bezos-worthy challenges of corporate America to do the same. The gauntlet has been cast down.
Sanders, for now, is placated. Amazon workers are jubilant and, like magic, Santa Claus will have a prime assist come Christmas 2018.