
If Jeff Bezos wants to help low-income people why not just pay them better? - pmoriarty
https://www.theguardian.com/commentisfree/2018/sep/14/jeff-bezos-low-income-people-pay-amazon-workers-better
======
dfischer
Wow this is ridiculous. The fund is aimed at homeless and educating early.
This is not relevant to anyone he employs. Some people are so ready to get
their pitch forks. Damn.

~~~
eganist
Walmart recently learned that paying people more than enough to get off of
government benefits would more often precipitate better engagement and loyalty
to the company, resulting in less frequent turnover, etc.
([https://qz.com/work/1094309/walmart-yes-walmart-is-making-
ch...](https://qz.com/work/1094309/walmart-yes-walmart-is-making-changes-that-
could-help-reduce-income-inequality-in-america/))

Amazon has yet to learn this one little trick. They think they're being clever
by underpaying unskilled labor and leaving them to rely partly on government
benefits, but then they end up having to make up for it by hiring more often,
losing time to training, having to load up schedules to make up for lost time
(making each employee more expensive anyway), and ultimately defending
themselves against nasty articles documenting their work practices.

If Walmart--the company which practically invented the practice--can move on
from it, so can Amazon... a company that's mastered the art of reinvesting
profits both for continual growth and to dodge Wall Street payouts for well
over a decade.

~~~
dkural
If Americans are so keen to pay people better they should vote to elect
leaders who will increase minimum wage. But they don't. So it does seem that
the majority of voters don't care enough to increase minimum wage.

If Americans would like people to have proper access to healthcare, they would
not make it dependent on having a job and make it a universal right funded by
the government, but they don't.

I actually am an advocate for higher wages for all, and more government
subsidy of healthcare, education, and access to daycare / pre-school; but we
can't leave achieving these to whims of each business or the largesse of
billionaires.

Americans recently elected a president who enacted tax cuts that benefit Jeff
Bezos and the wealthier segment of society, at the expense of government
programs that could benefit the poor, the homeless, and the children in need
of care.

Also, from a purely business viewpoint: Walmart employs drastically more
customer-facing retail employees compared to Amazon thus (1) their morale and
behavior has a direct impact on the immediate customer experience (2) the
training costs (hence the cost of replacement) is higher due to the need to
train soft-skills and customer-facing skills etc. Amazon does pay hard-to-
replace employees way above minimum wage, including software engineering,
marketing jobs, automation, managers, etc.

~~~
skh
Race, abortion, and an irrational fear of taxation are enough to keep people
voting against their self interests. These are important factors to consider
when trying to understand voting patterns in the U.S.

~~~
phil21
> irrational fear of taxation

Curious when it becomes rational? Literally every federal income tax bracket
is more than the taxes on "tea" before the revolutionary war.

Most of us making decent money in high-cost world city are paying 50% or damn
near close to it in taxes.

What is left to tax? If you start taking much more from me I simply quit and
move to the third world where I can retire today with my current savings.

This whole meme of "irrational fear of taxation" is ridiculous. Those that
make money pay 50% or so in taxes, and we aren't seeing a whole lot of return
for that money. I'd pay 7% more if I moved to the Netherlands today, and get a
whole lot more than 7% in additional value.

~~~
WalterSear
What is left to tax are the rich who pay nowhere near what you do. They are
also why you are both dissatisfied with your post-tax income, and, to a lesser
extent, underwhelmed by what it buys for the government.

~~~
brain5ide
There's the old adage: the liberals don't care for the poor. They just hate
the rich.

The point is that, if a tax system relies on some, even arbitrary structure,
there will always be a way for a rich person to pay less by restructuring, and
the cost of restructuring will always be worth it the richer you are. The main
problem of this tax the rich fuckery is that the supposed rules usually bleed
onto the middle class in 10 to 20 years due to trying to make the ends meet.
Also, the unsolicited spending, of course, but that's another story.

~~~
_nalply
Perhaps we should tax something very human that nobody can escape?

Economy can be displayed as flows of money, labor and goods. We should look
hard at these flows and think where even the rich can't evade by
restructuring.

I don't have a pre-made solution, only ideas. The crucial idea is that one
rich person is a person after all. What do people do? They consume, give money
to others and export funds. Catch them when they do that. They can't avoid
eating and sleeping.

Therefore switching the focus of taxation onto things nobody can avoid would
be something society needs to contemplate and perhaps tackle. A completely
novel way would be something I call affluence source tax. It is similar to a
value added tax, however it is levied on everything a rich person does: buying
stuff, paying for labor and rent, bartering, and especially for exporting
funds!

Forget taxing legal entities because they are always being restructured to
minimise taxing. Just look at the people themselves, not the legal entities.

Probably this wouldn't be the granddaddy of all taxing solutions, and most
surely the rich will be successful in stopping this, but at least nobody can
stop me thinking about this problem.

~~~
jfnixon
So you are going to tax the necessities? Right, only the 'rich.' How do you
define 'rich'? High income? What about the small business owner who retires,
sells, and gets that one large payday? You gonna tax her like she earns that
much every year? High net worth? What if that net worth is structured so it
looks like some other entity controls it? The very wealthy will employ clever
people to beat your plan every single day and twice on Sunday, just like they
do today. Buffett pays a lower rate than his secretary for a reason.

~~~
_nalply
No, flat tax everything. The trick is: catch the people not the companies.
Because the rich consume and send funds a lot they will be taxed a lot.

Now to your example that some other entity controlling the net worth, this
won't help because if the rich person wants to buy a private jet with the help
of that other entity, the other entity will just pay taxes instead.

Because people are taxed, not companies, rich people can't avoid taxation. It
is just an idea.

~~~
WalterSear
Fwiw, they don't. They can't. They have vastly more money than they could ever
spend on themselves. The majority of their income is just directed back to
towards protecting and growing their capital.

The flaw in the entire capitalist premise is that this investment is assumed
to be an implacable driver of productivity, but as the market is purchased (a
free market is either for sale, or it's not actually a free market - it's a
manipulated market), investments flow into non-productive asset classes,
freezing consumptive momentum (ala Thomas Picketty's book).

Moreover, the sale of the market makes zero-sum games more attractive, since,
without the protection provided by competition, squeezing resources from
others becomes more attractive than creating new opportunity.

------
Zarath
This was my exact thought when I saw he was donating his money. How about
encouraging unions and providing healthcare and better pay?

~~~
jimmaswell
Would you rather he just donate nothing and keep everything else the same,
rather than donate? The scrambling to condemn this act of charity doesn't make
any sense.

~~~
wholinator2
They're not condemning the act of charity, they're condemning the working
conditions he subjects his employees to.

Yes, the act of charity is better than nothing but it seems people think that
money might be better spent on improving the quality of the jobs he offers
from the dismal self-destruction they are famous for. Also pointing out that
donating to charity ends up being tax deductible so it is truly the most
selfish public display of giving and that treating your workers with human
decency would be a selfless act he seems unwilling to do.

~~~
leetcrew
> Also pointing out that donating to charity ends up being tax deductible so
> it is truly the most selfish public display

i mean, he still ends up with less money. he just doesn't get taxed on the
money he gives away.

one could argue that donating is more tax efficient than paying workers more,
because then _their_ income would be taxed.

~~~
bostik
> _donating is more tax efficient than paying workers more, because then their
> income would be taxed._

Eh? Taxing a corporation less is better than having its employees earn more?

~~~
leetcrew
I was talking about tax efficiency in that post, not any grand moral claim.

although since we're on this topic, I would note that the US already spends as
much or more money per grade school student than most of the European
countries that we look to as models. this leads me to think that just shoving
more tax dollars into the bureaucratic rube goldberg machine might actually be
less impactful than a targeted charity effort.

------
0xmohit
Why should Bezos pay them better if he can get the state to compensate the
workers?

A new study found that 700 Amazon employees in Ohio are on food stamps:
[https://www.businessinsider.in/A-new-study-found-
that-700-Am...](https://www.businessinsider.in/A-new-study-found-
that-700-Amazon-employees-in-Ohio-are-on-food-stamps/articleshow/62511480.cms)

~~~
pravinva
The right way to look at it is that workers already on state support are
people who already have a bare minimum wage lower than which they won't get
out of bed for. i.e Amazon would have had to pay LESS if the state support
didn't exist.

------
elvirs
because charity is an ideal for stroking his ego while writing off taxes.

------
notSupplied
Because profits convert to a valuation multiple. Currently Amazon enjoys a
sweet sweet PE ratio, so it's more efficient to maximize profits, get rewarded
by investors, and then donate personally.

------
billions
Why not give A's to C- students? Because it sets an inaccurate perspective of
the rest of the world's expectations, setting them up for future failures.

Homelessness is a real problem that requires creative, focused and ambitious
solutions. If Bezos can even partially match Bill and Melinda Gates'
accomplishments the world will be a MUCH better place
([https://www.businessinsider.com/charts-bill-gates-
loves-2017...](https://www.businessinsider.com/charts-bill-gates-
loves-2017-2#4-extreme-poverty-is-slowly-going-extinct-4)). Here's hoping
Bezos gets some singles in philanthropy paving a path to home runs.

~~~
atomical
Perhaps Bezos will make investments in research on cost effective air
conditioning for warehouses.

------
omegaworks
I so wish this article went full wonk and went instead into the structural
incentives and policies that cause corporations to behave in this way.

Instead we got a piece about how CEOs use philanthropy to boost their image.
It leans more on a moral argument against the practice while ignoring the
practical, political barriers put in place that prevent CEOs from actually
doing anything about addressing wealth disparity. It almost gets there with
the lobbying against tax, but not quite.

Corporations are structurally sociopathic. They are legally bound to maximize
shareholder value above all other concerns.

~~~
dr1337
Exactly the reason why unbridled capitalism is terrible. I'd imagine that if
we had a genocide going on today, a company like Bayer would be rewarded by
its shareholders for manufacturing Zyklon B since the only reason for a
corporation to exist is to generate profits right?

------
gesman
Because it's expensive and has low PR value.

------
mgarfias
Maybe because if he paid people at amz more, he has to face the shareholders?
If he does it privately, he answers to himself.

------
pravinva
Poor logic. Without state support or food stamps Walmart or Amazon would pay
the lower wage employees even less - because the food stamps establish a
minimum bar which the employees can expect. Without that support, the market
for low wage employees would be even more competitive resulting in lower wages

------
em3rgent0rdr
> "Bezos has long been criticised for his glaring lack of a philanthropic arm,
> long after he became the richest man in modern history"

Bezos only just became richest person in the world this July 2018. It is
perfectly reasonable for him to wait till he gets rich enough to claim the
richest person title once before entering philanthropy. Also, he is only 54.
Give him a break...most CEOs haven't even retired by them.

Also as CEO, Bezos has a fiduciary duty to make as much money for the company,
which might unfortunately mean paying workers market rates. However by
starting his own personal philanthropic fund, he can spend money for that
however he believes best helps people, without worrying about what is best for
a company.

------
yumraj
This doesn't make sense to me and are not mutually exclusive.

Amazon Inc. employes and pays people, where as a CEO he has certain
responsibilities and duties, and is answerable to the board, which he needs to
take into account.

Here he's donating his personal money which does not require any such
considerations and he can do what he wants.

------
propman
Because he’d go out of business and then couldn’t: grow and create billions of
wealth for everyone, create and improve new technologies and have thousands of
employees gain a bunch of skills and then have to downsize and employ less or
raise prices which will kill their competitiveness and harm millions who buy
their product.

They are following the rules. The rules have given us soooooo much over the
last 100 if not 10 years. They can be vastly improved but lazy, monolithic
ideas that take no consideration of cause and effect is the wrong populist
movement to effect meaningful change.

~~~
Noumenon72
I imagine it's much easier to maintain a company culture where everyone is
directed toward only profit than one where it's well known they are passing
out extra goodies and everyone would like some.

------
P_I_Staker
He has an ethical responsibility not to. This is a big problem I have with
capitalism and publicly traded companies. It's a problem without an answer,
since I don't intend on trying other forms of government. Ultimately, his
responsibility is to the shareholders. If mistreating employees is legal, and
is in the best interest of shareholders, he has a responsibility to mistreat
them. Doing anything else is unethical. We can haggle about whether it
actually helps shareholders, especially in the long run. We can even encourage
more corporate responsibility. At the end of the day, this is a tough issue to
get around. This is why we need regulations with teeth.

~~~
IntelMiner
I think you're mixing up "ethical" and "legal" responsibilities

Putting humanity first over shareholders is not an "ethical" problem

~~~
rgbrenner
He doesn't have a legal responsibility either. This is a myth. CEOs have broad
discretion to act in ways that are beneficial to a company.

Costco is not acting illegally, or even against their own interests, by paying
workers higher wages. They can make the very true argument that paying higher
wages results in happier employees that reduces turnover (and therefore
training costs), increases sales (since employees are more knowledgeable about
products), and results in happier customers that increases repeat
visits/member retention.

If the shareholders disagree with the way that the CEO is maximizing company
value, then the correct response is to replace the board through a vote, who
will replace the CEO.

There's no legal or ethical argument here. Costco doesn't exist in a
hypothetical world where everything stays the same, but wages get reduced to
minimum wage. Taking that action has costs for Costco, and the end result may
or may not result in an increase or decrease of company value. Hypotheticals
aren't valid legal cases.

------
goatherders
Amazon is a publicly traded company. As CEO, even though he has a lot of sway,
Bezos has a responsibility to maximize shareholder value. Half of that is
maximizing profits. Half is controlling costs.

~~~
melling
That old myth:

[http://www.latimes.com/business/hiltzik/la-fi-warren-
shareho...](http://www.latimes.com/business/hiltzik/la-fi-warren-shareholder-
myth-20180816-story.html)

~~~
slededit
Not the best article - if it’s a myth why does Senator Warren need to
introduce new legislation?

~~~
neltnerb
Because it looks good, and companies need some pressure to adopt new practices
that go against their institutional assumptions, even if the new practices are
better. Not sure if I agree with her about employee votes or community votes
or thresholds, but they're interesting ideas to think about. Obviously it's
not getting passed anytime soon, so I read it as a starting point for a
conversation. I think both make logical sense, thinking of it as required
unionization and an adjustment to require companies that have more power than
towns take those towns into account somehow. Definitely an approach to think
about.

Occasionally, industries will ask as a group to be regulated because it's too
hard or risky to take a step on their own, even if they all agree it's a good
idea. Salt would be an example where the big companies all generally agree
they can easily reduce it without anyone noticing if they all do it at the
same time, but if only one does it they'll taste noticeably worse. So the only
way they can figure to start reducing salt is by getting a regulation written
to make it happen.

It's a curious system.

~~~
slededit
I’m actually interested in proof it is a myth - but this article is not it.
It’s an ad for Senator Warrens re-election campaign

