
Amazon raises minimum wage to $15 for all US employees - deegles
https://www.cnbc.com/2018/10/02/amazon-raises-minimum-wage-to-15-for-all-us-employees.html
======
rubidium
There's been similar moves in the past. Most famous of which is Ford's $5 /
day. [http://www.saturdayeveningpost.com/2014/01/03/blogs/post-
per...](http://www.saturdayeveningpost.com/2014/01/03/blogs/post-
perspective/ford-doubles-minimum-wage.html)

Ford's quote from the time is relevant today: “The owner, the employees, and
the buying public are all one and the same, and unless an industry can so
manage itself as to keep wages high and prices low it destroys itself, for
otherwise it limits the number of its customers. One’s own employees ought to
be one’s own best customers.”

~~~
skybrian
Yeah, I don't take that explanation at face value because it's describing a
perpetual motion machine. Sales to your own employees are only going to be a
trivial amount of revenue for any reasonable business. And I'm sure he knew
that.

But interpreted charitably, it's showmanship. This is a way to show
leadership, get a lot of publicity, and hire better workers, so what's not to
like?

~~~
igravious
No, yours is the uncharitable explanation.

In reality it shows that Ford understood that all of us are in this together
(“The owner, the employees, and the buying public are all one and the same”) –
and we take it that Ford was not only referring to his own employees but to
all employees. So if you want the public to be able to by your goods then we
ought to recognise that the public must be able to afford those goods. By
extension, even though a capitalist might want to increase profits by keeping
wages low he must realise that he decreases the market for his own goods – _if
enough owners think this way_ – (“and unless an industry can so manage itself
as to keep wages high and prices low it destroys itself, for otherwise it
limits the number of its customers”). To sum it up, (“One’s own employees
ought to be one’s own best customers.”) doesn't mean that every single one of
your employees will buy your product – rather it's an aspirational statement
encouraging all owners to pay their employees a living wage and not to
myopically fixate on margins and the bottom line.

It would be showmanship if Ford said this and then turned around and paid his
employees crap and worked them to the bone, but

“In 1914, Henry Ford made a big announcement that shocked the country. It
caused the financial editor at The New York Times to stagger into the newsroom
and ask his staff in a stunned whisper, “He’s crazy, isn’t he? Don’t you think
he’s crazy?”

That morning, Ford would begin paying his employees $5.00 a day, over twice
the average wage for automakers in 1914.

In addition, he was reducing the work day from 9 hours to 8 hours, a
significant drop from the 60-hour work week that was the standard in American
manufacturing.”

[http://www.saturdayeveningpost.com/2014/01/03/blogs/post-
per...](http://www.saturdayeveningpost.com/2014/01/03/blogs/post-
perspective/ford-doubles-minimum-wage.html)

You're the uncharitable one. You're either a sink-or-swim type or dead cynical
because I can't believe you're not intelligent enough to be able to take what
Ford said at face value.

I watched a video today about a young American describing his visit (for a
sprained foot) to a clinic in the Netherlands and an emergency room in
Germany. He recounted his visits because he was so shocked that at how little
he had to pay for an X-ray and meds and how little time he waited to get a
referral and how little time he spent in the hospital. I honestly think that
there's something deeply damaged at the heart of the American psyche. You've
no sense that you are “are all one and the same” to use Ford's words. You
can't see why collectively paying taxes for healthcare (everyone's family has
an illness at some point in time) and collectively bargaining for cheaper
medicines from manufacturers might be overall a good thing. You can't see why
paying regular folks a living wage benefits all of society, even those who
have to do the paying. No man is an island, we're all in the same boat. But
hey, I'm all right Jack, I've got mine huh? There's only so much inequity and
hardship people will take before something breaks – history shows us this time
and time again.

~~~
biocomputation
<< I honestly think that there's something deeply damaged at the heart of the
American psyche. You've no sense that you are “are all one and the same” to
use Ford's words. You can't see why collectively paying taxes for healthcare
(everyone's family has an illness at some point in time) and collectively
bargaining for cheaper medicines from manufacturers might be overall a good
thing.

More than half of Americans support single-payer. Some estimates are as high
as 70%.

[https://www.cnbc.com/2018/08/28/most-americans-now-
support-m...](https://www.cnbc.com/2018/08/28/most-americans-now-support-
medicare-for-all-and-free-college-tuition.html)

I absolutely support single-payer and so do most of the people I know.

There isn't a HN thread long enough for the discussion of what it might take
to actually get single-payer done.

~~~
igravious
70% ? If that's true then that's _fantastic_ but also _very worrying_.

This shows that whereas the majority of the nation support some form of
single-payer option the government (no matter who is in charge) resists it.
This means that the government works for the few, not the many. This implies
an _oligarchy_ which turns out to be verifiable[0]. Out of interest I looked
up all the countries that have neither free nor universal healthcare[1] and
cross-ranked them according to their human development index[2]. The list is
quite small. What we see is that the US is the _only_ country with a
_supposedly_ very high human development index (and the only one in the top 70
of countries) that has a healthcare system that is neither free nor fair. 8
out of the 10 _least developed_ countries in the world are on this list. How
Americans are not figuratively up in arms over this is beyond me. I think it
is fair to say that the US political system is broken in a very real sense.
This is worrying because traditionally only catastrophe curbs inequality this
bad[3] and I'm not sure incrementalism works in a broken system. Oh well, time
will tell.

    
    
       Country			Free?	All?	Level	Rank
       United States		No	No	V	13
       Saint Kitts and Nevis	No	No	H	72
       Grenada			No	No	H	75
       Lebanon			No	No	H	80
       Dominican Republic		No	No	H	94
       Jordan			No	No	H	95
       Suriname			No	No	H	100
       Dominica			No	No	H	103
       Marshall Islands		No	No	H	106
       Turkmenistan			No	No	H	108
       Indonesia			No	No	M	116
       Iraq				No	No	M	120
       Tajikistan			No	No	M	127
       Micronesia			No	No	M	131
       Kenya			No	No	M	142
       Cambodia			No	No	M	146
       Angola			No	No	M	147
       Cameroon			No	No	M	151
       Syrian Arab Republic		No	No	L	155
       Zimbabwe			No	No	L	156
       Nigeria			No	No	L	157
       Mauritania			No	No	L	159
       Senegal			No	No	L	164
       Comoros			No	No	L	165
       Sudan			No	No	L	167
       Haiti			No	No	L	168
       Afghanistan			No	No	L	168
       Gambia			No	No	L	174
       Guinea			No	No	L	175
       Guinea-Bissau		No	No	L	177
       Mozambique			No	No	L	180
       Liberia			No	No	L	181  
       Mali				No	No	L	182
       Sierra Leone			No	No	L	184
       Burundi			No	No	L	185
       Chad				No	No	L	186
       South Sudan			No	No	L	187
       Niger			No	No	L	189
       Somalia			No	No	-	---
    

[0]
[https://www.theatlantic.com/business/archive/2017/02/scheide...](https://www.theatlantic.com/business/archive/2017/02/scheidel-
great-leveler-inequality-violence/517164/)

[1]
[https://en.wikipedia.org/wiki/List_of_countries_with_univers...](https://en.wikipedia.org/wiki/List_of_countries_with_universal_health_care)

[2]
[https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...](https://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index)

[3] [https://www.businessinsider.com/major-study-finds-that-
the-u...](https://www.businessinsider.com/major-study-finds-that-the-us-is-an-
oligarchy-2014-4?IR=T)

------
maym86
Jeff Bezos in the announcement. “We’re excited about this change and encourage
our competitors and other large employers to join us"

Is this an attempt to pressure its competition with less money in the bank to
do the same, loby for a higher minimum wage and drive them out of business?

Maybe it's a reaction to the union organizing taking place a whole foods and
they think this will be cheaper in the long run.

I don't buy the "automation is just around the corner so we can afford to
raise wages for a smaller workforce" argument I've seen here because that
remains the same even if they kept the wages at the same level.

Happy with the result but I'm curious what the motives are. Bezos wouldn't do
this unless he saw a benefit for the business or his hand was being forced
somehow.

~~~
manfredo
Even if it is motivated by an attempt to gain competitive advantage, it's
still a good thing. If the competition can't find labor at less than $15 an
hour, then they'll either go out of business or start offering competitive
pay. It's an example of capitalism working both for business and employees.

~~~
philliphaydon
So once competition is gone what happens?

~~~
criddell
Regulate or break up the monopoly if they abuse their monopoly power.

~~~
philliphaydon
The monopoly exists because competition cannot begin because of minimum wage,
so how is that an abuse of power? You couldn't argue that in court to regulate
it.

~~~
criddell
Being a monopoly isn't the problem. It's when monopoly power is abused that
the government steps in.

~~~
philliphaydon
So my original question was. Once the competition is gone... what happens?
This a government regulation problem not a monopoly problem.

~~~
criddell
What happens? Are you asking what the government would do if Amazon gains a
monopoly and abuses that power?

If so, there are lots of possibilities, including the break of Amazon into
baby-Amazons like AT&T in 1984 or Standard Oil in 1911. They could install
overseers like they did when Microsoft was found guilty of abusing their
monopoly. It wouldn't be an unprecedented situation.

~~~
philliphaydon
You’re missing the point. If a monopoly is created because of government
regulation and no competition can thrive because of government policy. There
is no monopoly abuse. It’s just how it is because the government screwed up.

~~~
criddell
So what was different with AT&T? You couldn't just create a phone company and
compete with AT&T. They had franchise agreements with cities and exclusive
rights for space on telephone poles.

They were still found to be an abusive monopoly even though their monopoly was
created by government regulation.

------
chiefalchemist
This is:

\- 25% PR

\- 25% free advertising for their openings (i.e., Amazon pays well)

\- 25% necessity (we're at full-employment)

\- and 25% ROI (they've figured less turnover and better quality employees are
worth the investment)

The question is: how will this effect other companies in the markets where
Amazon employs a measurable number of people.

~~~
joezydeco
And 100% "Get out of Bernie Sanders' crosshairs before he regulates us to do
this"

~~~
psychometry
No democrat is getting any substantive bill through Congress and signed into
law until 2020. I don't think they're afraid of Bernie.

~~~
toomuchtodo
Midterms will be here in a month. "Bernicrats" (Left progressive Democrats)
have been doing extremely well in recent elections and polling.

If you're not afraid as a Republican or a corporation, you haven't been paying
attention.

[https://www.bloomberg.com/news/articles/2018-09-18/internal-...](https://www.bloomberg.com/news/articles/2018-09-18/internal-
rnc-poll-complacent-trump-voters-may-cost-gop-control-of-congress) (Internal
RNC Poll: Complacent Trump Voters May Cost GOP Control of Congress)

[http://time.com/5411948/national-voter-registration-drive-
re...](http://time.com/5411948/national-voter-registration-drive-record-
midterm-elections/) (A Record 800,000 People Registered to Vote on National
Voter Registration Day)

[https://abc13.com/politics/texas-sets-new-voter-
registration...](https://abc13.com/politics/texas-sets-new-voter-registration-
record/4382365/) (Texas sets new voter registration record, with 15.6 million
registered ahead of election)

[https://sacramento.cbslocal.com/2018/10/02/ca-voter-
registra...](https://sacramento.cbslocal.com/2018/10/02/ca-voter-registration-
record/) (California Voter Registration Tops 19 Million In New Record)

~~~
shimon
You're not wrong, but you do realize that the outcome of a midterm election
won't affect the president's authority to sign or veto bills?

~~~
toomuchtodo
I do. Midterms is a tee up for regime change in 2020. Gotta play the long
game.

------
nebulous1
I mean, they get such bad press for the way they treat their workers it only
seems fair to laud them for this. Good move. They have more to do though.

I've went through a few articles on this but I didn't see any of them mention
what Amazon's minimum actual pay was before this, just the federal minimum
wage. Anybody know?

~~~
umanwizard
Did Amazon actually pay any worse or have worse working conditions than any
other unskilled warehouse job?

If so, why didn’t the employees change jobs?

If not, why is so much criticism directed at Amazon specifically, rather than
at capitalism itself?

~~~
leesec
I don't know why you're down voted. People like to shame Amazon/Walmart for
their wages and working conditions, but I guarantee they're doing a lot of the
exact same things as other companies who are less criticized, Target, Meijer,
etc..

Like he said, Amazon has it's issues but the employees were free to quit and
work at other similar positions in similar companies.

~~~
chc
If I cheat on my wife, can I point to somebody else who's also cheating on
their wife and that exempts me from criticism? Does somebody have to be doing
a _completely unique_ bad thing in order for people to be able to criticize
them?

People criticize Amazon and Walmart more than other companies because Amazon
and Walmart are bigger than those other companies. That seems like an entirely
fair reason for them to get more attention.

~~~
moftz
And if you cheat on your wife, it's not like she's going to divorce you that
day and be married the next. Not everyone can just pickup and go to the other
fulfillment warehouse next door. Amazon has their warehouses in a lot of small
towns and I'm sure many of them were not doing so great before they showed up.
People like having a job, they don't like having to shop around in a place
where there might not be too many opportunities.

~~~
AnthonyMouse
> People like having a job, they don't like having to shop around in a place
> where there might not be too many opportunities.

But that's the point, isn't it? They put the warehouse there because it's
where the cheap labor is. If you shame them into not paying less than $15/hour
then the next warehouse they open might as well be in a place where $15/hour
is the prevailing wage, or it was $14.75 with low unemployment and their
presence only bumps it up to $15, meanwhile everyone in the small town they
originally would have built in goes to the unemployment line.

~~~
chc
It's weird to me how we tend to talk about whether worker protections are
harmful in hypothetical terms, when we can actually look at history and see
that society improved as more protections for workers were implemented, and
inequality has gotten worse has gotten worse as worker protections have waned.
I love a good philosophical exercise as much as anyone else, but the real
world has shown us the answer sheet for this question.

~~~
AnthonyMouse
When times are good, people agitate for "worker protections" and get them
because the economy is doing well enough to absorb the cost. Then when the
economy declines, capital successfully lobbies to relax the rules to keep the
country's industry competitive.

The result is that good times correlate with more labor laws, but the
causation goes the other way.

~~~
chc
Are you suggesting the New Deal came about because the 1930s were so
prosperous? I don't think that is a very common view of the Great Depression.

~~~
AnthonyMouse
The New Deal was primarily a jobs program, not a rise in worker protection,
and the things that pass for worker protection are really quite anti-
progressive or subtle covers for various corruption.

For example, social security pays benefits based on past income rather than a
fixed or need-based payment, and the social security tax is a flat rate with
an income cap, making it one of the most regressive taxes short of a poll tax.
Meanwhile the amount of political corruption and mafia involvement in labor
unions in the era of the Wagner Act makes it highly suspicious that their
original purpose or effect was actually labor protection.

And to the extent that there were new actual labor laws, they were often
largely symbolic or ineffectual. For example, the original federal minimum
wage only applied to jobs in interstate commerce, which at the time _actually
meant_ interstate commerce. By contrast, many of the actually-meaningful
state-level minimum wage laws were passed during the boom times in the 1920s.

Most of the meaningful labor and safety regulations we have came out of the
economically prosperous period of the 1950s and 60s, e.g. that's when the
federal minimum wage was extended to other workers, and then extended further
in the economically prosperous period in the 1990s.

------
calvinbhai
IMO, this is a genius move by AMZN

\- Cuts down on bad PR \- Makes employees happy (while they dont get RSUs) \-
Make the employees genuinely skilled in operating semi-automation equipment \-
Make competitors bleed, because either they pay $15 per hour or face the PR
wrath, while trying to catch up with AMZN in terms of automation.

If you think for a moment that AMZN started replacing 90% of employees with
automation, they can still afford to give $30 per hour, and get good PR, while
making the competitors look bad for paying $20 per hour.

I hope this doesn't lead to a minimum wage law that requires AMZN competitors
to pay $15 per hour. It'll only mean death to those competitors.

~~~
dheelus
AMZN is also lobbying to raise the Fed minimum wage to $15/hr

~~~
calvinbhai
makes sense right?

Amazon goes for the kill with it's mostly automated warehouses, cashierless
and automated checkouts to make life hard for a lot of retail and warehouse
competitors

~~~
prolikewh0a
Sounds like a monopoly that needs a little breaking up.

[https://i.imgur.com/IC8Ehgh.jpg](https://i.imgur.com/IC8Ehgh.jpg)

~~~
travmatt
This is the sentiment they’re trying to stave off.

------
drawkbox
Very smart. Amazon and Bezos is one of, if not the, best at reinvesting
profits back into the company, mostly for research and development or new
products. Increasing employees pay can also boost the machine and the product
which many companies have forgotten, wage increases are pro-growth which
increase consumer power.

Many Amazon employees will probably buy more from Amazon and comparatively
Amazon looks good to workers/customers/competitors which may end up in higher
sales, all that can be reinvested back into the product.

Amazon is hard to beat with product strategy.

~~~
prolikewh0a
I didn't hear anything about improving working conditions. The employees in
Seattle making $15/hr already are still being treated like shit.

~~~
drawkbox
That isn't an Amazon specific thing though, it is an American workplace thing
that is more like a dictatorship/feudal empire than anything with rights.

In the US, we live in 'freedom' but then go work on a feudal/sharecropper mini
states that act like fiefdoms for corporate overlords.

Labor rights are not even along for the ride anymore, they got left at the
station somewhere in the early 80s.

Look at how companies even see raising wages when they know that is a critical
part of growth and as American as apple pie, however wage increases have been
_efficiently metric optimized and worked out of the system_.

SCOTUS just recently agreed that forced arbitration is legal [1].

> _In a 5 to 4 decision, the Supreme Court’s more conservative justices ruled
> that companies can use arbitration clauses to block employees from banding
> together in class action suits._

Corporate overlords, who serve the next quarter earnings only, might even get
non-competes to be valid with the way things are going, not looking good for
labor. Amazon employees might be able to change conditions if they were
weren't locked into forced arbitration.

Raises are very American and needed in a consumer economy that requires growth
and new demand, those are almost gone.

Competition is very market friendly and American, non-competes are everywhere
and are the most anti-American, anti-business and anti-competitive thing that
currently exist, they only favor established and large corporations over
investors, entrepreneurs and small/medium companies coming up. If arbitrators
are allowed to determine non-competes validity, competition, entrepreneurship
and innovation is over.

[1] [https://www.nytimes.com/2018/05/21/business/supreme-court-
up...](https://www.nytimes.com/2018/05/21/business/supreme-court-upholds-
workplace-arbitration-contracts.html)

~~~
prolikewh0a
I agree with all of your points. Noam Chomsky recently points out that when
you walk into work in USA now, you're really walking into something akin to a
communist dictatorship [1]. Private Governments.

[1] [https://taibbi.substack.com/p/preface-an-interview-with-
noam...](https://taibbi.substack.com/p/preface-an-interview-with-noam-chomsky-
the-fairway)

------
genericone
I suppose there has been some 'breakthrough' in their warehouse automation
stack? I suppose in the rest of the USA a doubling of wages will definitely
get them through an awkward longshoreman period, "well I'm being paid more
unexpectedly, I suppose I can't complain about the robots". Once the robots
are well established in operations, they can start to cut labor back some
more.

~~~
TangoTrotFox
I think there's a much more simple, and clever, explanation. We're looking in
the wrong direction. Bloomberg recently ran a story [1] that Amazon is
planning on opening up to 3,000 more cashierless 'grab and go' stores by 2021.
They are clearly planning on trying to take over physical retail, and this is
quite a nasty attack on current players such as WalMart or convenient store
type locations.

These companies will not be able to compete with Amazon's cashierless stores.
And they absolutely will not be able to compete with them at $15/hour minimum
labor costs. This will require these companies to start transitioning to
automated systems. But this would be a PR disaster -- firing huge numbers of
people earning a hair above minimum wage to replace them with machines? Yeah
that'll go over well. By contrast since Amazon is coming in with [relatively]
near 0 employees from the get go, they won't face such issues. And an even
better side effect here is that this would have a double feedback mechanism.
Amazon improves their image of working to do more for their employees at the
same time that their competitors are ruining theirs, just to be able to
compete!

They just fired a huge salvo towards physical retail outlets. If Amazon does
manage to successfully lobby (or create sufficient public pressure) to enact a
$15 minimum wage, Amazon could practically won the physical retail game before
they even meaningfully enter it.

[1] - [https://www.bloomberg.com/news/articles/2018-09-19/amazon-
is...](https://www.bloomberg.com/news/articles/2018-09-19/amazon-is-said-to-
plan-up-to-3-000-cashierless-stores-by-2021)

~~~
genericone
Good point, I think its a definitely a multi-pronged approach, their labor
right now is limited to factory workers and whole-foods right now. My view of
whole-foods is that they may already be paying at or above $15/hr wages, so
that leaves factory workers, who are being used mostly for sorting goods from
large bins into smaller bins.

Amazon fulfillment centers are right now using warehouse robots to retrieve
large bins from really really tall 'shelves' because that is a solved problem
for Amazon. The sorting into the smaller bins is left to humans because they
are faster and more accurate at the moment for awkwardly shaped items.

What is the state of computer-vision, part-identification, and compliant-
actuator pick-place robots inside Amazon? Have they released any whitepapers
or research papers on robotics of note recently, acquired any interesting
automation companies recently?

------
csdreamer7
Bezos felt the Burn!

I would still support Bernie's bill. Walmart pays the least of any major
retailer. The market power they push onto communities undermines much of the
social fabric of America. Small retailers really can't compete with Walmart
and a lot of small business owners would feel guilty asking their employees to
go on welfare.

Charging Walmart for employees who apply to welfare would likely lead to pay
increases and more small business competition.

Walmart struggles to retain people so I honestly doubt they would fire them
for going on welfare they would be billed for (regardless if it legal or not).

~~~
Fellshard
Individual companies raising their minimum wage is perfectly reasonable. They
know what their bottom line can handle, and any consequences are fairly
limited to the company itself and its competitors, for good or ill.

An entire national economy raising a minimum wage is pulling yourself into the
air by tugging on your bootstraps - futile, and likely to make you keel over
instead. There's no alternatives if it fails or has catastrophic effects.

Much like software, businesses work best when there aren't single points of
failure - damage is limited when things go wrong. Individual companies can
experiment and make decisions that would be dangerous for an entire economy,
with nowhere near the same level of risk for anyone except the people at the
top.

~~~
rbg246
It has been pretty plain to see that relying on individual companies to raise
minimum wages has failed and that companies see no need to increase wages from
their myopic perspective.

A country knows what their bottom line can make good decisions as well.

They employ economists and other experts who can assess the effects of raising
a minimum wage in a way that an individual company cannot assess.

Countries can also experiment and make decisions on available data and have
controls like inflation and other macroeconomic levers to adjust wage levels
to prevailing economic conditions.

I think shutting off an entire sector of economics and leaving it purely to
the 'free' market is a dangerous suggestion

~~~
Fellshard
This is a case of seeing what they want to see, though: they'll listen to
economists who tell them what they want to hear, i.e. that more government
power will be helpful, and ignore the vast number of economists that take a
more durable analysis.

Also, I'm not sure if you're reading the same article as I am; this is a
private company raising its own minimum wage, from its own myopic perspective.

------
senthilnayagam
Amazon acquired Kiva systems in 2012, now has over 15000 robots in its
warehouses. these robot don’t need lighting or air conditioning, no unions ,
no overtime. Higher salary means quicker ROI. Smart Move.

Amazon Rising minimum wages is a “amazing” choice. it’s competitors who use
more employees in their store will go out of business soon.

Also will be impacted are fast food restaurants chains and coffee and beverage
retailers, who are barely surviving in current market.

~~~
krapp
>these robot don’t need lighting or air conditioning, no unions , no overtime.

That's not entirely correct. They need air conditioning because the bins they
carry around need to be climate controlled. And they need humans to pick
things up from the floors when they fall out of the bins and sometimes drag
the Kivas away manually when they malfunction.

Automation is at the point now where it can put a lot of people out of work
but it also creates its own class of expensive problems that still need human
intervention.

------
aurizon
One major function of minimum wages is to offset the fact that union wages
keep ratcheting up and in rust belt areas the minimum wage people could not
afford the new items made by union people, like cars - so that is why they buy
used cars - if any. In a sense there is a need for a maximum wage as well, to
limit this factor.

This reduced spread between high and low wages is why Germany does so well -
in effect the country becomes a large efficient factory. Which is why unions
have a management role, board seats etc, so they know when an excess wage is
bad for the company and for the country as a whole. Japanese and Korean unions
do this as well, but in general do not have board seats. The USA lacks in this
respect, so we have a lot of poor at work without enough money to buy much
stuff - and selling stuff builds the economy.

------
kidsnow
I was driving past In-N-Out burger yesterday and they offer $16 an hour to
start and then goes up to $18 an hour. No wonder the employees there are
usually happy.

~~~
GaryNumanVevo
Branch Managers usually make 6 figures there too! Their food is also pretty
good for the price.

------
toasterlovin
People often complain about power concentrating in a few companies, but an
interesting side effect of that is that it should, in theory, increase the
bargaining power of labor. It's a lot easier to unionize a handful of huge
companies than it is to unionize a whole bunch of smaller companies. This move
by Amazon is probably a reflection of that.

~~~
tomjakubowski
Matt Bruenig draws the same conclusion here.
[https://www.peoplespolicyproject.org/2018/01/16/small-
busine...](https://www.peoplespolicyproject.org/2018/01/16/small-business-
promotion-is-mostly-a-bad-idea/)

------
propman
Amazon says no more RSUs in exchange for $15 min wage, can anyone say how much
the RSUs were for those employees? I’m curious as to what the difference is?

~~~
B-Con
Where did you see that?

I doubt hourly warehouse workers are getting RSUs to begin with, that tends to
be for salaried positions only.

~~~
philsnow
from [https://blog.aboutamazon.com/working-at-amazon/amazon-
raises...](https://blog.aboutamazon.com/working-at-amazon/amazon-raises-
minimum-wage-to-15-for-all-us-employees) :

> Is anything changing with Amazon’s RSU program? > Yes, we’ve heard from our
> hourly fulfillment and customer service employees that they prefer the
> predictability and immediacy of cash to RSUs. We will be phasing out the RSU
> grant program for stock which would vest in 2020 and 2021 for this group of
> employees, replacing it with a direct stock purchase plan before the end of
> 2019. The net effect of this change and the new higher cash compensation is
> significantly more total compensation for employees, without any vesting
> requirements, and with more predictability.

note,

> significantly more total compensation for employees

but is that at current AMZN prices or projected prices?

Take a look at the chart for AMZN zoomed way out. All I see with this is they
want to hold back those high-growth RSUs and they're paying out in cash to
distract people from looking into whether this is actually a good deal, long-
term.

~~~
krapp
>All I see with this is they want to hold back those high-growth RSUs and
they're paying out in cash to distract people from looking into whether this
is actually a good deal, long-term.

Most of the questions at the all-hands meeting held at my FC today were about
stocks, so if they wanted to distract anyone, it didn't work.

It seems like a definite good deal for part timers and full timers who don't
stay two years. For everyone else, I mean, working at a fulfillment center
shouldn't be part of a long term AMZN investment strategy. Full timers already
get their 401K, and the extra income seems more useful than a couple of shares
years down the road.

------
MrsPeaches
A shout out to Organise[1], who have been creating lots of pressure on Amazon
in the UK.

[1] [https://www.organise.org.uk/](https://www.organise.org.uk/)

------
nimbius
This was a tactical move, i suspect. Restless employees at Wal-Mart type
stores can generally get on with another nickel on their paycheck and an
angry-dome presentation on how unions will destroy the world. Not so here.

When your employees are filing for food stamps and urinating in plastic
bottles, things are only a few war-boys away from Mad Max. No amount of safety
meeting shilling is going to convince these people...many of whom source
Amazon as the only major employer in the region...that a union is bad. Amazon
likely raised wages to prevent the larger thread: mass unionization across its
warehouses that could spread to managers, programmers, SRE teams, etc..

~~~
erikpukinskis
If conservatives want to use "get people off welfare by paying them more" as a
political tactic:

Great.

------
propman
Let’s say $11 was the previous avg wage for let’s say 300k employees (250k
full and 100k part time avg). $4 increase is $8000 more a year. That’s $2.4B
yearly transfer to workers which is honestly really really amazing, props to
Bezos.

$8000 means 15.3% in payroll taxes so this wage increase will result in
$367.2M in additional payroll taxes.

12% federal income tax as well for that $8000 is $288M per year.

So amazon is paying $655M more in taxes with a stroke of a pen and raising
wages by $2.4B for those who make near minimum wage. In terms of taxes, this
is equivalent to the US adding 48,000 high paying 50k a year jobs to the
economy.

Who says Amazon doesn’t pay taxes? It’s much better for the economy if
companies higher more people than higher fewer and pay the equivalent in
taxes.

Great job Bezos and Amazon!

~~~
slivym
>Who says Amazon doesn’t pay taxes?

Can we do away with this now please. Amazon paying the taxes it can't avoid
doesn't act as an excuse for avoiding the taxes that they do avoid. In fact,
excusing Amazon's tax avoidance with the income tax it's employees pay is even
worse. It's still a problem. We still need to tackle it, and if this pay rise
acts to dissuade people from real tax reform and real workers rights then
forget the 2.4B this move is probably profitable for Amazon.

~~~
radicaldreamer
Jeff Bezos paying sales tax on his morning coffee is enough for the people
looking for an extra dopamine hit by rah rahing Amazon. $15/hour still isn’t
enough to live on in many cities and large scale tax evasion by corporations
is one of the single most insidious epidemics in our society today.

~~~
pathseeker
You need to look up the difference between tax evasion and tax avoidance. If
Amazon was evading taxes and there was any evidence of it, they would be hit
hard by the IRS.

~~~
krustyburger
I don’t say ‘evasion’. I say ‘avoision’.

------
itamarst
The blog post says "employees". No reporter I've seen has bothered to ask if
it applies to contractors.

~~~
Cthulhu_
Wouldn't contractors set their own rates?

~~~
CydeWeys
No. The majority of "contractors" in America are really just employees of
subcontracting firms who have way fewer rights, don't get benefits, and have
to pay applicable employment taxes themselves instead of the company taking
care of it.

~~~
prolikewh0a
It is exploitation at the highest levels.

Employer pays subcontracting company $30-$35/hr, subcontracting company pays
the employee $15/hr or lower and pockets the rest. Subcontracting company
offers benefits at almost 1/2 of your paycheck every month, and nothing else.
Subcontracting company offers you nothing of benefit except for the job you
could've gotten without them if the parent employer posted the jobs but they
don't because then it would be FTE. Parent employer only provides the job
openings to the subcontractor. This is all done so the parent employer can
avoid paying any benefits.

It should be illegal in my opinion. A lot of lower level tech jobs and now
even software development are going this direction. It's very big in Seattle
and in my field it's impossible to move jobs unless you're willing to drop
your salary $40k/year and wait for a __potential __FTE opening in which that
company will hire you FTE, but you don 't know how long you'll be making
minimum wage.

------
eecc
Anyone complaining that this will increase inflation or reduce their
“advantage” (bastards), do bear in mind that this means several thousands will
get off food stamps and thus reduce the burden on tax funded budgets. So
there’s that

------
ashelmire
I think this is a big step in the right direction. It'll help keep workers
happy and reduce stress. It doesn't solve all of Amazon's problems, but it's
an easy fix to something they often receive criticism about.

------
manigandham
As usual, nothing is ever that simple.

This is a direct assault on Walmart by getting the government to raise wages,
which are not viable for retail heavy jobs that cannot be automated or
streamlined like warehouses.

It's good PR in the face of their recent news, and will definitely help people
in the short-term, but it's also a very shrewd business move and may lead to
externalities that cause more damage in the long-term.

------
e12e
The article states the minimum will apply to seasonal and part time employees
- but AFAIK Amazon employs a lot of people on so called 1099 contracts - the
nyt coverage seems to imply those will be unaffected:

[https://www.nytimes.com/2018/10/02/business/amazon-
minimum-w...](https://www.nytimes.com/2018/10/02/business/amazon-minimum-
wage.html)

Only example I've on hand is this ft article from 2013:

[https://www.ft.com/content/ed6a985c-70bd-11e2-85d0-00144feab...](https://www.ft.com/content/ed6a985c-70bd-11e2-85d0-00144feab49a)

"A global employment agency called Randstad, which had handled the recruitment
process for Amazon, was also to arrange his shifts, manage him on the
warehouse floor and pay him his near-minimum wage. After three months, if he
had performed well, he could apply to be an Amazon employee, though there was
no guarantee he would succeed."

Still, I seem to recall reading about extensive use of similar contracts at
Amazon, more recently too.

------
prolikewh0a
Now they're going from $7.25 with medicaid, to $15/hr with no health insurance
and no subsidies. The $15/hr middle is rough.

------
rajekas
Bezos was getting squeezed on both sides. Trump hates him and Bernie hates
him. That's got to be unique in the annals of robber barronism. Today's
announcement gives him an escape hatch from being a political lightning rod.
He's no Elon.

I am amazed the commentary across the web is about Amazon's reasoning and
almost no coverage of the patient organizing done by the SEIU and countless
others to make $15 the minimum wage.

Then again, that silence is arguably a good thing, for it hides the fact that
socialist ideas are increasingly mainstream in the heart of capital :)

------
zygotic12
Got to give it to the guy. I bet that having his peers in court might have
helped the decision (regardless). [https://en.wikipedia.org/wiki/High-
Tech_Employee_Antitrust_L...](https://en.wikipedia.org/wiki/High-
Tech_Employee_Antitrust_Litigation)

------
jxramos
I wonder what the actual cost to them was since a change in rate is only a
hypothetical to some extent. You have to multiply the delta rate by the number
of applicable individuals. What's the `n` for the number of employees who
actually worked minimum wage for Amazon? Is it a vast amount of people?

~~~
HEmanZ
A quick search shows the average salary was $13/hr according to Glassdoor,
with a range of $10/hr-$19/hr. That makes this on average a 15% pay raise,
which isn’t something to scoff at, but isn’t as crazy as the pay raise of 7.50
- 15.00.

------
ralmidani
Amazon should be commended for making a move in the right direction.

I personally think people should be paid more. $15 * 40 * 52 comes out to
$31,200. Before payroll and income taxes. That's barely enough to survive in a
small city like Flint, MI (I live in a suburb of Flint), let alone somewhere
like NYC, Seattle, or SF.

~~~
shimon_e
This is minimum. It should apply to people with no experience, in training, or
living in the middle of no where. There is no reason to live in an expensive
city if you can make the exact same amount of money in a cheap city.

~~~
ralmidani
People don't always choose which city they live in. Family, college, etc.
might dictate where they live.

~~~
shimon_e
Those people should be earning more than minimum.

------
anoncoward111
I make more as a waiter with absolutely 0 experience. Being a waiter is
better, more stable pay than many office and warehouse jobs.

Something is severely wrong when food service is more profitable than
manufacturing and distribution and tertiary-degree stuff.

~~~
shimon
What's the wrong here?

Waiting tables is a hard job, and not everyone can do it well. It's physically
and mentally taxing, and to make money at it you have to be charming which is
harder to train than, say, packing boxes in a warehouse.

Good-paying waiter jobs tend to be in high-cost cities, so you'll spend more
money on housing, transit, and food than a worker in a suburban warehouse.
Waiters are also harder to substitute for - due to the small scale and
personal nature of restaurant service, it's unlikely a restaurant could
drastically improve waiter productivity without impacting the customer
experience.

Also, to your point in comparing the hourly rate: warehouse and office jobs
offer a different type of financial value to workers - relatively predictable
schedules. If you're a student, working a few evenings a week and raking in
tips is great. If you're trying to support a family, getting consistent full
time hours may be more appealing than a higher hourly wage with lower/less
consistent hours.

~~~
anoncoward111
I appreciate your evaluation of waiting tables as being a job that involves
physical work (hot plates, standing, walking, carrying) and artful work
(verbal skills, kindness, presentation etc).

Maybe not everyone can do it, but once I got laid off from my 4th or 5th IT
sales job in 6 years, I said to myself, "self, it's time to find something
more stable".

The very first people to offer me a shot were a very busy italian restaurant,
and everything is going amazingly well considering when I started, I didn't
know how to make an espresso or hold 3 plates!

Still, it is really shocking to me that so many of my colleagues are in the
same boat: Reputable college degree, no stable office job.

Our customers are all mostly old/retired couples. We appreciate their
patronage heavily, but we greatly wonder why their money is being spent on
food and entertainment rather than high tech skills.

This forces us to specialize in skills that will never deliver a 10x leap in
innovation. The market for food service is saturated and we will never make
enough to jump to the upper class.

~~~
ericd
>This forces us to specialize in skills that will never deliver a 10x leap in
innovation. The market for food service is saturated and we will never make
enough to jump to the upper class.

That's the flipside of it being more stable. To make a jump, you need
something that's higher variance, which IT sales certainly is.

------
exabrial
I love to see companies freely choosing to pay their workers more. I oppose
any such government regulation however because of macroeconomics. Sad to see
they're going to spend as bunch of money on Congress lobbying now.

------
danieltillett
Well the smart money sees massive inflation ahead. Combine a enormous deficit,
a very tight labour market, rising tarrifs, and now large pay rises for
workers, and we are in for a time of high inflation.

~~~
blazespin
Nah, amazon is planning on investing in robots.

~~~
danieltillett
You don’t see inflation coming? Even if Amazon plans to invest in robots the
knock on effect up the wage ladder will still have a massive effect. You can’t
just raise the minimum wage to $15 and leave the people previously on $15 on
the same hourly rate.

------
agotterer
Have there been any studies around the length of time increasing wages is
actually beneficial for? I assume we’ve been here before and companies
eventually increase prices or inflation kicks?

~~~
nemo44x
It depends really. It could cause an inflation in prices but not necessarily.
It could come out of the profits a company makes as they try and compete by
keeping their prices lower while still paying higher wages. This would have an
effect on the share price of the company as their bottom line would decrease
but could also increase share price if they make it up in volume due to being
more competitive. It could also create efficiency in the company since they
would incentivized to have fewer employees making more money while producing
more efficiently.

------
swifting
[https://m.youtube.com/watch?v=PNJxdvquvK4](https://m.youtube.com/watch?v=PNJxdvquvK4)

A nice piece on the minimum wage by Economist Walter E. Williams

------
onemoresoop
Perhaps they raised minimum wages with the future goal to lay off staff that
can be "robotized". After that the remaining workers would certainly have a
HIGHER WORKLOAD of dealing with the robots and would most likely not be
willing to work for less than $15/h. This can also can earn amazon a good guy
reputation so that their future move can be justified. I hope i'm wrong but my
instinct tells me that Amazon will not loose a cent on this move.

------
test6554
So now that Amazon's worst employee gets $15 per hour, what happens to the
salary of a more-skilled, more-motivated employee who busted their ass to get
their salary up to $18 per hour when the minimum was under $8? Does it stay
the same or increase proportionally?

What happens to the prices at amazon.com? With a 3.8% profit margin, can they
really eat this cost without consumers noticing, and if so, will they elect
to?

~~~
dluan
Past economic studies have shown that by increasing the workers' wages, the
company can also increase their own revenue and earnings, especially if the
company is a sort of baseline goods provider like Amazon is.

------
ggm
Forced to it, because of political downside risks.

Forced to it, to try and undermine a widespread unionisation call.

But.. I suspect in the end, Bezos cannot stop labour organising.

------
wil_wheat_on
[https://www.forbes.com/sites/randalllane/2018/08/30/bezos-
un...](https://www.forbes.com/sites/randalllane/2018/08/30/bezos-unbound-
exclusive-interview-with-the-amazon-founder-on-what-he-plans-to-conquer-next/)
everything he's going after is going to cost jobs or create many low wage jobs

------
chapekaloco
I'm a front line warehouse associate that has been working in one of their
facilities for over 3 years. There are parts to this puzzle that the media
isn't focusing on and some insights I'd like to offer on their general pay
philosophies. I'm not very smart but perhaps I at least have interesting
perspective to offer.

[https://steemit.com/amazon/@chapekaloco/amazon-com-and-
the-m...](https://steemit.com/amazon/@chapekaloco/amazon-com-and-the-move-to-
a-usd15-base-wage)

tl;dr, my overall compensation has declined slightly as a result of this
change but there are a slew of benefits Amazon will reap from this

~~~
exotree
This is really good writing, and it is fascinating context. Do not sell
yourself short. Thank you for your contribution to this thread.

~~~
chapekaloco
Thank you. Wish I wasn't late to the HN party. Replies are buried unless
you're early to the show. Oh well.

------
ryanmarsh
As far as the HN crowd is concerned I’m so capitalist/conservative that people
would probably call me alt-right, though I’m not.

That said, I think this is incredible and I don’t understand the (non
sequitur) arguments that $15/hr AS A FEDERAL MINIMUM WAGE would hurt
businesses. As a capitalist the higher base wages are the less worried I have
to be about a socialist uprising of legitimately poor oppressed people abused
by a plutocracy. Besides, do we want to live in a nation where someone who
works hard is still way below the poverty line? If businesses can’t compete at
$15/hr wages perhaps that’s a sign they should have used automation a long
time ago.

------
simons_says_99
partially funded by the removal of RSU stock grants

~~~
itgoon
I agree with their assertion that hourly employees "prefer the predictability
and immediacy of cash to RSUs."

$15/hr still isn't much. $30K year. Sure, it would be nice to get a fat payday
down the road. People living on low wages have much more immediate needs.

Why wait for a (maybe) payout, if you can't feed your kids today?

~~~
MichaelApproved
$15/hour isn't much but it's fantastic for _entry level_ pay. That's the
minimum. Most people will be getting paid more.

And, yes, of course money today is better than maybe money tomorrow. For
example, higher pay today could allow someone replace a car that keeps
breaking down on them. That reliability and cost savings of not having to pay
for repairs can be worth more than stocks in the future.

Edit typo

~~~
kamarg
Honest question, do those raises amount to anything? Or is it akin to the
$0.25/hr that many retail employees see that doesn't even provide them with
the equivalent of an additional paycheck over the course of a year?

~~~
MichaelApproved
Another article mentions all employees will get a raise based on a curve
related to the minimum increase. However, it's not clear just how that curve
will look.

This raise is a good move, so I'll give them the benefit of the doubt that it
won't be a superficial raise until the actual numbers come in.

------
ada1981
This is a great way to do it.

Much rather have companies adopt progressive policy then lobby for competitors
to have to adopt it vs. lobbying to resist progressive policy.

Plus, they get the PR bonus, they will siphon off the best workers until it’s
mandated everywhere, and when it is, they will have benefited and then be on
equal playing field.

What are the downsides? (Unless you don’t want $15/hr min wage).

------
longerthoughts
Looks like this isn't great for all of their employees due to removal of
existing perks: [https://finance.yahoo.com/news/amazon-employees-say-will-
mak...](https://finance.yahoo.com/news/amazon-employees-say-will-make-less-
raise-174028353.html)

------
banku_brougham
The wealth of nations is not the accumulated gold in reserves. It is the
vitality, health and industry of the people.

------
smpetrey
I mean, Amazon could've just as easily agreed to $25 minimum wage. But, hey
progress I suppose (or is it inflation?).

------
throwaway5752
This is a bit of a minor point, but is Sen. Sanders going to rename the bill
from "Stop BEZOS Act" now?

~~~
DonHopkins
"Stopped BEZOS Act"

------
swebs
>In addition, the company also pledges its public policy team will lobby for
an increase to the federal minimum wage from $7.25 — it doesn’t identify a
specific wage that it’s targeting, but instead says, “We believe $7.25 is too
low. We would look to Congress to decide the parameters of a new, higher
federal minimum wage.”

I'm going to take a wild guess and assume it will be $15/hour. That way
they'll get to look progressive for adopting this wage early, while mitigating
their competitive disadvantage by forcing every other company to raise their
wages too eventually.

~~~
pkulak
Wow, does the top comment always have to be cynical? This is exactly what
everyone wanted Amazon to do. Maybe it's time to suck it up and give praise
where praise is due?

There are also benefits to paying more salary than your competitors (no hiring
shortages, best employees, low turnover, etc), so I'm not going to blindly
accept that it's now in Amazon's interest to drag the rest of the industry
along with them.

But even if I did, there's absolutely no guarantee that this kind of lobbying
would ever work. And if it did, it could be decades from now, $0.50, or both.
In the meantime, Amazon has already put their money where their lobby is.

~~~
L_Rahman
When the topic in question is how one of the most powerful companies on Earth
chooses to use its power we should strive to always be this cynical.

Skepticism of concentrated power is the ur-American political belief. We seem
to have forgotten that lately.

~~~
pkulak
If you're willing to shame a company for behavior you don't like, I think you
should be prepared to give praise when they do exactly what you just asked
for. When you constantly move the goal posts just so that you never have to
abandon your righteous anger for even one day, what kind of incentive does
that give companies to change their behavior?

~~~
meko
Companies don't really deserve praise, practically ever because their motives
are ultimately guided by profits. They only act in the interest of revenue.
Sometimes those interests align with the employees, but let's not pretend this
isn't self preservation on amazon's behalf.

~~~
mikybee93
That's silly. You could also say that humans don't really deserve praise since
our motives are ultimately guided by our self interest. We only do things to
make ourselves feel good, or make ourselves look better. I think that
companies have many paths towards self preservation, and that choosing the
paths that lead to a better world deserve praise regardless of motive.

~~~
komali2
I disagree there, because all throughout history are examples of genuine
heroes who stood to benefit not at all from their actions. Vince Coleman[0]
comes to mind.

Humans can be motivated by many things, profit and looking good included. I'm
vaguely aware of a philosophical branch that postulates that all actions are
selfish, but that ain't science and so I disagree. People will sacrifice their
pyramid of needs towards s greater good, I've never heard of a company utterly
scuttling profits over the greater good though.

On that note, in this case Amazon obviously is shedding profit for a greater
good here, especially if they actually lobby, so in this case I believe they
(particularly the people that made this decision) deserve praise.

(0)[https://en.wikipedia.org/wiki/Vince_Coleman_%28train_dispatc...](https://en.wikipedia.org/wiki/Vince_Coleman_%28train_dispatcher%29)?

~~~
darawk
It doesn't matter whether they're doing it for a 'greater good' or not. You
should praise them anyway. They took steps to create the world that you want.
It doesn't matter why they did it.

~~~
andrepd
It does matter. In my view: if they were "forced" by bad publicity to do a net
positive thing it hardly matters at all (except for the employees in
question), because the systems and structures and incentives to keep acting
selfishly and greedily are still there intact. No real change was effected.

~~~
darawk
I disagree completely. They didn't have to capitulate to those forces. They
chose to. If you reward them for doing so, they'll capitulate more readily in
the future than if you do not. This is really simple: carrot and stick.
Everyone knows this approach to literally everything works. People seem to
want to discard it here because they don't want to let go of their negative
emotions, because they've come to identify with a sense of moral outrage
completely divorced from any objective social goals.

------
myroon5
Interesting to note:

"The U.S Bureau of the Census has the annual real median personal income at
$31,099 in 2016."

[https://fred.stlouisfed.org/series/MEPAINUSA672N](https://fred.stlouisfed.org/series/MEPAINUSA672N)

------
myth_buster
@dang Looks like a bug [0].

The story has been on top of the page for a while now with over 500+ votes. I
believe it got merged with a new story that messed up the vote count.

0: [https://imgur.com/kYztZ9T](https://imgur.com/kYztZ9T)

~~~
dang
Not a bug, just a manual kludge I did in order to share some karma with the
original submitter. The submission that was at #1 before that is
[https://news.ycombinator.com/item?id=18120667](https://news.ycombinator.com/item?id=18120667).

~~~
deegles
Appreciate it!

------
pulsarpietro
It makes you think of Henry Ford.

------
known
Why We Need a Social Wealth Fund

[https://jacobinmag.com/2018/08/social-wealth-fund-alaska-
peo...](https://jacobinmag.com/2018/08/social-wealth-fund-alaska-peoples-
policy-project)

------
meuk
Is ~15 dollars an hour considered good? It seems pretty high from a European
perspective. In my country, minimum wage is about 10 eur/hour, and 15 eur/hour
is normal for a junior developer.

------
ck425
Hmm, I wonder how much Amazon expect their sales to increase by if a $15
minimum wage in implemented. Could it be a case that they expect the increase
in customer spending to offset the costs?

------
ksec
Hopefully this will moves the bottom wages up, as well as putting pressure to
up the Middle Class salaries.

Next US has to figure out how to (much) lower Rent / property pricing.

------
RichardHeart
If you're going to bite the bullet and pay your employees more, you mind as
well hope that everyone else does as well, so they can afford to buy more from
you retail.

------
ryanmarsh
This is really great but unless it’s done on a curve people who’ve worked very
hard for a long time to get to $14.95/hr will be getting fucked.

------
eksemplar
Doesn’t amazon operate as a middle man for a lot of independent service
workers, like Uber does for drivers? How does the $15 apply to them?

------
outside1234
Call me a cynic, but this must mean they are on the verge of needing vastly
fewer, but more skilled, folks in their warehouse.

~~~
ptbello
This. I just made the exact same comment[1] before I saw yours

[1]
[https://news.ycombinator.com/item?id=18121684](https://news.ycombinator.com/item?id=18121684)

------
Simulacra
Well I don’t agree with unions politically, the threat of unionization does
have a positive effect at times ...

~~~
behringer
You're against employees of a company banding together under the right of free
speech and negotiating with a company as a group?

~~~
Overtonwindow
Woah check out that straw man argument! I think what OP was saying, which you
may have missed, is that politically they don’t agree with unions. Neither do
I. Unions appear to suppress wages, block people from jobs who are not members
of the union, and engage in bullying tactics against those who don’t want to
join. On top of the fact they take that money (util recently, forceably) taken
from employees and used for political means which go beyond the purpose of the
union! A lot of Amazon workers were threatening to unionize, so when I think
the original post was saying is that the threat may have worked.

~~~
behringer
Strawman? I defined a union for you.

And we don't know if the "threat" worked. Let's wait to see the full benefits
package before we judge ;)

------
Scarbutt
What happens or what are they going to do with those that are already earning
$15/h?

------
WisNorCan
With almost a million employees the decisions by Amazon are impacting a large
part of the (150 million) US workforce.

The dysfunction in our government is rising at a time that corporations are
growing bigger than ever.

The obvious result is that companies like Amazon will have an outsized effect
on the major issues for our society, like minimum wage and healthcare.

~~~
adventured
Nothing has actually changed about the scale of corporations. That's just a
popular talking point (it's actually always a popular talking point).

US GDP in 2000: $10 trillion

US GDP in 2018: $20 trillion

Largest market caps in 2000: Microsoft & Cisco, about half a trillion dollars.
Double that to match the doubled GDP, and you get an Amazon today.

Amazon is not more powerful than these companies at their peaks: GM, Ford,
Walmart, Sears, Standard Oil & Exxon, IBM, US Steel, JP Morgan, AT&T, Kodak,
etc

The US Government's spending has more than doubled in size in the last 20
years as well. Its power has dramatically increased as well since the mid
1990s (just the capabilities for control that the espionage improvements and
law changes have given them, is extraordinary).

~~~
shimon_e
How does it look with population increase taken into account?

------
ddingus
This helps in the human struggle a majority of Americans are experiencing
right now.

------
polskibus
What about Amazon employees in other countries? Will they be given a raise
too?

------
specialp
Median amazon warehouse employee pay is 24k a year. Amazon has around 300k
warehouse employees. Jeff Bezos's wealth alone is equivalent to all 300k of
them working 22 years at their current rate.

~~~
ApolloFortyNine
Why are warehouse workers entitled to anywhere near the share the creator and
owner makes?

~~~
specialp
I wasn't saying they were. This is far from anywhere near. Bezos was not able
to make all his money due solely to his hard work, it was off the backs of
others including all of us whom have to subsidize the workers that he is
making 300k X their near lifetime earnings.

~~~
ApolloFortyNine
The whole reason why warehouse workers are paid so little is because just
about anyone can be trained to do it. It's simple economics.

You are kind of right about subsidizing workers, but that's more of the
government's fault for how our social services benefits work. It's not
Amazon's fault the going rate for labor is below the rate that the government
will provide benefits for.

~~~
hannasanarion
Since when is "economical" equivalent to "good"?

The whole reason children work in coal mines is that others can't fit down the
holes, it's simple economics.

The reason black slaves work the fields is because white folks don't want to
do the work for the going rate, it's simple economics.

Economic forces are not guaranteed to produce a just society.

~~~
ApolloFortyNine
Did I say economical meant good? No, I said it's up to the government to
change the requirements if it's decided that a certain pay is required to
survive, and market forces won't lead to that amount.

Your other two examples are quite the jump though, and not really worth
commenting on.

~~~
behringer
So are you saying social services benefits should be lower? I don't get your
point.

~~~
Sohcahtoa82
I could be wrong, but I think ApolloFortyNine was simply pointing out the way
it is, not necessarily claiming that it's how it should be.

Amazon paid so little because they could. Amazon just wants profit. If people
want Amazon to pay more because their wage is not a living wage, they should
take it up with the government to increase minimum wage.

~~~
behringer
I see now what he meant thanks.

------
agotterer
How much were amazon warehouse and Whole Foods employees making prior?

~~~
behringer
12 to 14. 15 probably still won't be enough to stop government subsidies going
to Amazon employees.

------
ct520
So tell me again how this doesn’t effect someone making 50k a year?

------
xutopia
Don't they outsource most of their work to other companies?

------
aymeric
So much cynicism in this thread.

------
sungju1203
this is great. they now have more motivation to replace them with robots.

------
kbad1000
Can they do the same in India?

~~~
ss2003
Does Amazon have a presence in India?

~~~
worldexplorer
Yes Amazon is huge in India.
[https://www.businesstoday.in/current/corporate/amazon-
india-...](https://www.businesstoday.in/current/corporate/amazon-india-
valuation-16-billion-e-commerce-flipkart-market-share/story/277375.html)

~~~
intended
Labor in India will be affected by changes in NREGA, over amazon.

------
beders
What about benefits? Or is the taxpayer going to shoulder that bill? Like it
does with Walmart workers?

------
ahmetyas01
I call this shut up money

------
ptbello
Call me cynical, but it could also be that AMZN will be automating all those
lower paid jobs - as in: soon they won't even need 7.25$/H employees because
they'll have machines.

In this scenario, 15$/H would just be their current price point for the
following tier of bottom of the chain not-yet-automated tasks.

~~~
patagonia
Wow brilliant analysis. Automate the lower pay jobs away before your
competitors can. Push for raise in minimum wage. This is “Walmart kills mom
and pop shops” at a whole new level.

This is also how I see the robot job apocalypse playing out and why we need
political change that can handle both the wealth generation and rapid job
churn / requirements for job training that AI and robotics will bring. Either
pay more or have the wealth disbursed. The alternative is, as has always been,
concentrate the wealth in the owners of capital. But this times it’s
different. Current wealth generation by capital is unprecedented. And
technology allows control and capture of that wealth in an unprecedented
manner. At the same time regulatory and political structures have done nothing
to deal the with the negative costs associated with the process. What is the
point of having an economic machine the likes of which history has never seen
if it all just ends up on a ditigal legder for a few dozen people while
automated factories are running in the dark and requiring resources stripping
the planet of resources needed for you know like ecosystems and such. Not
sustainable. So. Yeah. Amazing move for Amazon. Where does everyone else fit
in the picture.

~~~
maerF0x0
Luddites have always been saying "this time is different" about technology.

And economists have always been saying "no its not".

I understand that robots+AI will eventually be superior to humans (their
evolution rate is faster than ours, extrapolating...) . The question is how
many life times away is that. Moore's law ended, maybe AI will asymptote too?

------
Zarath
Awesome! I still hate Amazon but this is really nice to see.

------
tapatio
Now if only they'd shutdown WaPo.

------
cs702
_Enlighted_ capitalism:

The more money the masses earn, the more they will spend on products and
services, from movie tickets to electronic devices to new automobiles.

The more all of us earn from each other, the more we spend with each other.

The more all of us spend with each other, the more we earn from each other.

Globally, AGGREGATE SPENDING = AGGREGATE INCOME.

------
arrty88
>“We listened to our critics, thought hard about what we wanted to do, and
decided we want to lead,” said Amazon CEO Jeff Bezos in the announcement.
“We’re excited about this change and encourage our competitors and other large
employers to join us.”

Ha ha. This shouldn't have taken much thinking Jeff. It's a no brainer, no?
The more you pay your people, the more they can spend on your stuff.

~~~
philwelch
> The more you pay your people, the more they can spend on your stuff.

This is the economics equivalent of a perpetual motion machine.

~~~
hannasanarion
Isn't that what an economy is?

Are you telling me that if your employer stopped paying you, you would keep
spending the same as you do now?

~~~
stale2002
No, that's not what the economy is.

Here is how it works. Let's say Amazon doubles someone's salary, from 30k a
year to 60k a year.

And let's say that previously, this person was spending 1k a year on Amazon.

Since the worker now has double the salary, let's say it doubled the amount
that they spend at Amazon, from 1k to 2k.

Doing simple math here, you see that Amazon is now spending 30k more, only to
get an extra 1k in revenue, for a total decrease of 29k.

Arguing that this person will spend all 30k of this additional money at Amazon
is ridiculous.

And even _more_ ridiculous would be arguing that this perpetual motion machine
actually creates value, above and beyond 30K.

------
flexie
$15/hour is still not much in the international market where Amazon sells its
goods. In large parts of Europe it's less than what a warehouse worker makes.
It's still barely enough for an adult to be able to pay his/her half of family
expenses in the US. A lot of employees will still need a second job.

And it only comes now, 20 years after the company's founding, after it has
huge profits (and can deduct expenses like salaries in the profits before
paying tax), after it has crushed all competitors with extremely low wages
that were only possible because many employees received government handouts
too (so subsidized wages), and after it de facto has secured itself a
monopoly.

And many employees are still on temporary contracts.

It's too little and too late.

~~~
mlevental
>$15/hour is still not much in the international market where Amazon sells its
goods. In large parts of Europe it's less than what a warehouse worker makes.

i don't understand this comment. while i'm all for warehouse workers getting a
fair wage i don't understand the point of comparing a us wage, being paid in
the us, to us workers, to foreign workers in foreign economies? yes USD 15 is
not enough to survive in Oslo but these people don't live in Oslo! $15USD is
double the average us minimum wage! before taxes for a full working year
that's 30k. again in many places in the us that's enough to get by and even
probably save a little.

again i think everyone should be getting a fair wage and unskilled laborers
should be treated with respect and dignity but that particular line is
nonsensical.

~~~
calvinbhai
+1

And I'm not sure about the actual numbers, but something like $30K per year
basically puts one in a top 10% of the world, and more than $50K, you are
already in the 1% of the world, by income. (not sure if that factors in cost
of living).

~~~
mlevental
not trying to disparage but this comment is wrongheaded in exactly the same
way as the one i'm responding to. us workers don't live in subsaharan africa -
so it doesn't matter if 30k is top 10% worldwide because we don't have global
wage equilibrium. 30k for a single person is fine - you can eat and rent an
apartment and probably drive a crappy car. it is not enough for a family, it
is not enough to save for retirement, it is not enough to save for further
education, and it is not enough to save for medical emergencies. it's not good
enough.

------
allengeorge
They must have automated enough, or shifted enough work to contractors that
this is now materially not a big deal.

~~~
crdoconnor
I wonder if anybody else remembers 2007 foxconn pledging to automate 90% of
their factory workers out of a job when they started unionizing.

~~~
Cthulhu_
Or more recently, McD's introducing ordering booths not long after employees
started demanding higher wages.

------
czep
Opponents of the minimum wage argue that it reduces employment by creating an
artificial floor on wages, that jobs are lost because employers can't afford
to pay the minimum. But if you can't pay the minimum, then you didn't really
have a job to offer in the first place!

By extension of this logic, employers could argue that they are losing jobs
because they can only afford to pay someone who will work 12 hours a day, or
can only afford to pay child workers, or can only afford to hire if they get a
huge payroll tax cut. Granted, in the job market there are people who would
take sub-minimum wage pay for a variety of reasons -- desperation, lack of
education, lack of options near their home, felony record, undocumented
status, etc. But it is disingenuous to suggest that just because there are
people who would take such jobs, that our economy should allow employers to
get away with it.

If you can't pay a basic living wage, for fair hours, in safe conditions, with
necessary medical benefits, then you don't have a job to offer.

~~~
bhupy
> If you can't pay a basic living wage, for fair hours, in safe conditions,
> with necessary medical benefits, then you don't have a job to offer.

Why not let the employees decide if the job is worth taking? If there exists
people willing to voluntarily take a job given its wage/conditions, you have a
job to offer.

~~~
codedokode
This will lead to worsening conditions. For example, a person who lives with
parents and doesn't pay any rent can work for significantly lower salary than
the one who lives alone. For him even $1/hour is better than getting $0
sitting at home. Or immigrants who live 8 people in a room will be happy to
work for a lower pay. The number of available jobs is limited. So people with
higher demands, especially people with kids, will have a tough choice: either
stay unemployed or live 8 people in a room too.

~~~
civilian
The number of available jobs is _not_ limited, it's a supply and demand curve!

An employer doesn't just have X jobs to fill a business. They have some number
of tasks to do, and there's always more they could be doing. If they have the
option of hiring some people at $5/hr and some at $10/hr, the boss can figure
out how to get at least $5/hr in value out of the cheaper people he hires.

I think the person living with parents is a bad example too. $1/hr is nothing,
and it'd probably just be better for that person to not have a job at all.
Sometimes doing nothing is better than having a job that crappy.

~~~
codedokode
$1/hour is not nothing. If you work full month you get $160 which is more than
$0 that you get playing games all day long (also you spend less on an
electicity bill). So it is more beneficial than doing nothing.

In a market without minimun wage you'll have to compete against such people
for a job.

------
stirlo
While this is a very welcome development it would be more impressive to see
them reform their slave like fulfilment center work practises. Employees are
forced to walk massive distances, have their every move tracked and are
penalised for taking bathroom breaks. I doubt many people in Silicon Valley
would consider $15 an hour a fair compensation for the oppressive work
conditions.

~~~
tudelo
Yet I know of many people now who work hard jobs and make 15 dollars an hour
or less. Why does it matter if people in SV think it's good pay?

~~~
adventured
This new $15 line means that a very large group of labor in the US now earns
less than the lowest paid Amazon worker. It removes one of the two or three
primary criticisms of Amazon (at least for a while).

It's in fact a labor hammer on mom & pop businesses - who never pay well - at
a time when there's an intense labor shortgage. Most likely, Amazon had to
raise wages to fill its labor growth demands, and it's a PR benefit
simultaneously.

Given Amazon's profits are set to explode higher in the next few years, with
AWS and advertising (~$20b in profit in 2020 is likely), it'll give them a
competitive advantage to continue to raise wages as necessary and crush
everyone else that can't follow. Your typical small or mid-size retailer
simply can't generate the kind of return that Amazon can from advertising
(which has extreme margins), it puts them in a competitive league above and
beyond, which will spill over to being able to better compete on labor. It's
good for labor, bad for competitors.

~~~
crdoconnor
Amazon would still prefer to collect the money as profit (and use it to expand
or whatever). Their hand was forced by the labor unions.

------
tyingq
_Senator Bernie Sanders, for example, recently introduced legislation to end
what he calls “corporate welfare” — and it’s pretty clear who he had in mind,
since the bill was titled Stop Bad Employers by Zeroing Out Subsidies
(BEZOS)._

Bernie out-marketing AMZN is pretty funny.

~~~
chrisseaton
Maybe I've got no sense of humour, but I think that's unprofessional and
something like bullying, rather than funny. Legislation should surely not
target one individual by name like that?

~~~
ashelmire
I think turning your employees into welfare-dependent wage-slaves is far worse
than unprofessional or bullying, but I guess that's just me and most decent
people.

CEOs of large public companies have to take public heat, by name, quite often.
It's a huge part of their job; otherwise they'd be COOs.

~~~
zacharytelschow
> turning your employees into welfare-dependent wage-slaves

I wasn't aware staying with a particular employer was compulsory.

~~~
prolikewh0a
You're out of touch with the job market and reality itself. It's not easy for
these people to just "get a new job". They get paid minimum wage and are
probably living paycheck to paycheck. If these people just "move jobs",
they're out a paycheck for weeks and may lose their car, their home, not be
able to eat, etc.

~~~
irishcoffee
> If these people just "move jobs", they're out a paycheck for weeks and may
> lose their car, their home, not be able to eat, etc.

This gets floated around a lot. At least in the US I can't imagine a scenario
where not paying bills for 1 or 2 months results in homelessness and a repo'd
car.

Being both a homeowner and a landlord, I could not pay my mortgage for a year
before legal processes kick in, and if my tenants don't pay rent for a month
or two there isn't much I can do about it. I most assuredly can't kick them
out.

~~~
prolikewh0a
>This gets floated around a lot. At least in the US I can't imagine a scenario
where not paying bills for 1 or 2 months results in homelessness and a repo'd
car.

>Being both a homeowner and a landlord

You're in a totally different economic situation, and probably have little to
no economic struggles at all. I'll call this out of touch as well.

~~~
diminoten
A lot of the problems encountered in poverty are due to ignorance; of how
things work, where to get help, where the line is, it actually makes a lot of
sense that low-wage workers think that being without a job for 1 to 2 months
is a death sentence.

The real problem though is that "just get a new job" may or may not be
possible, but if it _is_ possible, the mechanics of how to do that are not
available to low-wage workers. It doesn't really matter that there are plenty
of jobs out there if the people who could work at them are not aware they
exist, or how to apply for them.

Education, as per usual, ends up being a barrier.

------
kork__
Because I don't want to starve.

~~~
ttoinou
Are you really going to starve ? Why aren't the products you need to buy to
not starve cheaper ? Maybe because of this kind of laws

~~~
joh6nn
Kraft-Heinz had $26.2B in sales in 2017, of which $9B was profit. They had 39K
employees. If we naively assume that all 39K are minimum wage employees
working full time all year, that comes out to a payroll cost of $1.2B. that's
approximately 5% of their total revenues, meaning if it had to be paid for
exclusively through new sales, the price increase per item sold would likely
be 5%. In reality, it would be much lower than that because Kraft-Heinz is
already paying a large portion of that $1.2B in its existing payroll costs and
not all of its 39K employees are minimum wage workers. So the argument that
food is expensive because of employee wages is provably false.

~~~
ttoinou

      provably false
    

False because you take a "real world" example and twist it to fit your beliefs
?

A good amount of the cost of what is produced comes from work. Hence the cost
of inputs is also dependent on the cost of work (does the company you refer to
contracts with suppliers ?)

If you force work to be paid 1 million USD / month, what happens ?

~~~
joh6nn
I didn't twist it to fit my beliefs: i presented a scenario that is actually
more expensive than what it would be in reality and showed how even that would
not be a substantial increase in cost, even if it was paid for exclusively by
increasing the price of products sold.

A $1M/mo additional increase in supply costs would be less than .1% of their
revenue. It just manages to be .1% at $10M/mo. Given that the $1.2B/yr payroll
cost I cited above is actually only 4.5% of Kraft's yearly revenue (I rounded
up to 5% for simplicity), the additional supply chain cost you present would
actually be covered by the 5% price increase I initially mentioned. It would
in fact be covered by that 5% even at $10M/mo.

~~~
ttoinou
But this company buys products from others company so ultimately an increase
in wages will feed through almost all inputs, hence output. Your calculation
is wrong

~~~
joh6nn
Yes, you already said that. You asked what would happen if their supply chain
raised payroll (and therefore prices) by $1M/mo. And I answered that question.

~~~
ttoinou
No my question is setting the minimum wage to 1 million USD per month (per
employee obviously). Of course 1 million USD / month more in cost is nothing

~~~
joh6nn
Obviously that wage isn't sustainable. The good news is that the majority of
people discussing wage increases are making good-faith arguments about
sustainable increases, and are not asking for a (ridiculous) $12M/yr minimum
wage.

I'm not sure I understand what point you're trying to make by presenting a
hypothetical wage that's 5 orders of magnitude larger than the situation being
discussed.

~~~
ttoinou
That you cannot create money out of thin air, that you are only trying to
force increasing the relative value of labor vs. capital / land / moral hazard
etc.

If your increase in minimum wage follows productivity then what's the point ?
It's like voting for no child labour laws after most of the children are not
working anymore

------
kork__
Socialism has only been tried in third world hell holes like Russia and
succeeded so far beyond expectations it ended up being called the second
world.

A first world country going socialist would be the equivalent of increasing
GDP by between 50 to 500%.

~~~
DataWorker
By up to 500%? Surely you can provide some external sources of information to
corroborate that claim?

~~~
Dylan16807
I don't know what they have in mind, but that sounds like something you could
do by improving income inequality. The top decile gets half the income. If you
redistribute half of that, you can double the income of the bottom 60%. If you
allocate that new money on a flat per-household basis, the high end gets
something like a 50% boost, and at the low end you have _millions_ of people
in deep poverty getting _more_ than a 500% boost.

Obviously that exact distribution is flawed, but I think it gets the point
across.

------
wonderwonder
Irrespective of if this was done out of altruism or political strategy, its a
good move on their part and they deserve applause. It is a very positive step
for their employees. Its also going to score points for Bezos in his ongoing
face off with Trump. Nice feather in Sanders' cap as well. I see no losers in
those directly involved in this situation.

------
crdoconnor
A good object lesson in what happens if you unionize.

Edit: Ooh, downvotes. Hi Amazon

~~~
themoat
I missed this story from earlier. Did they actually unionize? Or were they in
the early stages of unionizing?

~~~
SolaceQuantum
There were unionization efforts nationwide, including a somewhat wide
dissemination of boycotting on the "Prime Day" sale and appropriate lists of
demands including proper access to restrooms and raising of the wages.

------
dreamache
Get ready for higher Amazon prices. Raising the minimum wage == raising
prices, laying off employees, etc == hurts the poor the most.

------
sg7
So if they work 8 hours a day, they earn 120$ a day. Is this pre tax in the
US?

------
daveheq
Finally, it only took news reports of the abuse workers take and the insane
money Bezos makes to make this happen.

I only wonder why the workers took such abuse... was it really better work
than anything else around? Is the local economy around those places so bad
that these jobs were highly desirable, or did the workers just not understand
there were better things?

With a minimum-wage increase comes a higher amount of spending by these
workers since the lower the income the higher percentage of spending happens,
so that's more money going into the economy and spurning growth and hopefully
more competition, school/health/retirement spending, and job opportunities.

~~~
wutbrodo
> Finally, it only took news reports of the abuse workers take and the insane
> money Bezos makes to make this happen.

A low wage and abuse on the job aren't the same thing. Hopefully they're
addressing the abuse claims, but this is more or less irrelevant to those and
the coverage they received.

