Hacker News new | past | comments | ask | show | jobs | submit login
Amazon raises minimum wage to $15 for all US employees (cnbc.com)
768 points by deegles on Oct 2, 2018 | hide | past | favorite | 1006 comments

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...

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.”

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?

The point wasn't that paying employees more leads to sells.

Its more of a remark about the overall world. Your employees are somebody's customers, your customers are somebody's employees, You are somebody's customer. If nobody in the world makes enough to be a consumer, nobody consumes, and thus you have no customers.

Exactly this. I've spent the last year or so studying Ford. His whole point was that if people didn't have the money to buy his product or time to use it (he reduced work hours as well) then your business will never survive. He wasn't banking on employee sales, he was looking at employees as a snapshot of a wider market.

Great example is fast food as well. If you are offering the "lowest cost" food option, and providing the minimum wage, you've got product/purchasing power that are both at the bottom of the food chain. And if employees can't afford to buy your food... then who is going to? Your product doesn't match the market you'd supposedly be selling to.

This is why Ford is considered the creator of the middle class. He took automation and used it as a way to set a different standard for society, one that inherently helped his own product succeed in the long run.

Why is Bezos doing this? Because Amazon succeeds when people have more disposable income. And it starts with his company. sure he might get regulated to do it anyways, but now he is pushing the needle. Regulators might push an overall minimum wage hike to $15 because "if amazon can do it, why cant you?" The merits of that hike aside, know who stands to benefit from people having more money to spend? Amazon.

For a profitable company where wages are a major expense, it seems like lower prices with higher wages can only be achieved with higher productivity. I think an economist would attribute this more to Ford's assembly line?

But sure, a high-productivity business can lead the way on wage increases. Other businesses might have to raise prices to keep up.

I'd like to read more about Ford's effect on wages outside Detroit. This "creator of the middle class" sounds like it might be exaggerated?

> For a profitable company where wages are a major expense, it seems like lower prices with higher wages can only be achieved with higher productivity. I think an economist would attribute this more to Ford's assembly line?

FWIW productivity has literally exploded in the last few decades.

>For a profitable company where wages are a major expense, it seems like lower prices with higher wages can only be achieved with higher productivity. Productivity vs hourly pay has pretty famously stagnated since the 1970s[1] after being closely correlated for years before. The issue is simply that people aren't being paid enough for the value they add to companies.

[1] https://www.epi.org/productivity-pay-gap/

That first chart totally misses the hourly compensation upside that's observed abroad. Globalization really kicked in during the late 20th century so that's to be expected.

> Why is Bezos doing this?

workers organised

organise, workers!

LOL! Bezos is doing this to fuck Walmart. They employ much more minimum wage labor than Amazon does.

This is it.

That makes a lot of sense. I wonder why I've never before heard the part about Ford triggering an overall wage increase across the country as part of the often repeated story of him paying his employees more so they could afford to buy his cars. It doesn't make sense without that addition.

It's a great move. They might even push it to 16.amazon is like :ok, no problem, fire 20% and automate.

Small buisness will go out of business... So amazon is preparing its Monopol. Really smart.

Ford's $5/day wage doesn't happen in a vacuum.

The showmanship and publicity causes pressure on other manufacturers to pay that much. Otherwise, anybody working at a competitor will just be thinking to themselves "I'm just working here to get experience so I can have an edge on other applicants at Ford." Competitors that pay less will be dealing with high turnover unless they match Ford's wages.

And it's not just car companies that have to match wages. Other industries will have to keep up. And once everybody is making decent money, you have more customers.

Okay, but I doubt this had much effect outside Detroit. Anyone know the history?

This would be like claiming that high salaries in Silicon Valley are somehow going to fix inequality nationwide. There is some spillover but it only goes so far.

There's a large amount of people in other cities willing to move to San Francisco if the wage is higher than their current wage + moving and cost of living differences. That drives wages up in those cities by either paying more to keep employees or now needing to compete for a smaller pool of employees. The same pull on employees pulls people out of other industries into tech as well which should drive up wages.

The wages elsewhere aren't going to go up as high but it should have some upward drag

The history of the ford plant and the $5 a day wage was a seminal moment in the growth of the Industrial Age and the middle class, in general, worldwide (or at least in the western world). There are hundreds of sources, you should be able to find some good ones without too much trouble

Here's a good commentary:

http://archive.is/QX6kB == https://www.forbes.com/sites/timworstall/2012/03/04/the-stor...

Ford was paying above-par wages to have a more-stable workforce, because his production line was more sensitive to bad/absent workers than the typical factory of his time.

It also came with a fair dose of patronage, like inspections of workers houses to make sure they weren't drinking, and were teaching their kids english.

Maybe not 'fix inequality nationwide', but it seems reasonable that high salaries in Silicon Valley have driven salaries up in the industry across the country.

Source: tech worker in Seattle.

The economy is a sort of perpetual motion machine / ponzi scheme. It's based on some common hallucination that the things we buy matter, and it's all backed up by money we loan each other.

The moment we stop investing, borrowing and loaning, it will all come tumbling down. This is sort of what caused the panic of 2008 and why the governments had to step in with QE.

Without population growth, big parts of many national economies become unsustainable. They're like MLM, Ponzi Schemes, or other pyramid schemes in this way.

That's not true. Population growth and economic growth are related, but can happen without the other.

An introduction: https://www.brookings.edu/blog/up-front/2016/05/02/two-solut...

>Aging populations pose a challenge to the fiscal and macroeconomic stability of many societies

Entitlements, leveraged risk-taking, investment. All these things depend on the next generation.

I'm not sure that's ever been demonstrated empirically.

Its only a perpetual motion machine if you believe that economic growth is zero sum.

Give credence to the theory of velocity of money, and there is more to back this up.

If every business in an ecosystem takes that kind of stance it becomes true. As in if the whole ecosystem pays an significantly proportional wage result is an economy that outgrows costs because fact people's work create more and more value is generated. And also it's good showmanship. I bet at the time word of mouth was even more significant sales route. And you have literally a factory full of people. Now tell me if you know a guy working on it will you not ask him? So keeping him happy meant a customer who doubled as promoter. In my mind Ford just cut some marketing branch and rerouted the workload to factory workers and payed for it. It does not mean it BS if it can drive sales. The two don't have to be mutuality exclusive. I wish more people would not forget it

It is not just rewarding your employees. Your employees have more money, they spend more, it goes into the community who also has more money.

If the greedy people at the top take too much money for themselves, then the machine stops, no one buys cars, and there company sinks.

He meant that other employers will follow...the shoemaker will buy a Ford car and Ford employees will buy more shoes.

Wouldn't that be the definition of sustainability?

With our means of production, couldn't we achieve self sustainability amongst ourselves, or is there always someone slaving away?

> Sales to your own employees are only going to be a trivial amount of revenue for any reasonable business.

So true. But I wonder if locking in a steady “home base” to the overall market of price-conscious general consumers makes it worthwhile strategically.

Selling to employees isn’t sustainable long-term, but as a strategy for bootstrapping/sustaining word-of-mouth among your customers it might be very smart.

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.”


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.

<< 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%.


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.

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...

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

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

[3] https://www.businessinsider.com/major-study-finds-that-the-u...

As they say, America is a country of temporarily embarrassed millionaires.

> I honestly think that there's something deeply damaged at the heart of the American psyche.

Why is it the #1 destination country for immigrants?

Not because of the American psyche, because the US is better at marketing an idealized (and false) version of its culture to the world than other countries.

Nevertheless, the US is a country that considers guns an inalienable right, but not healthcare, education or a living wage. Most of the rest of the world would consider that a pathologically insane set of priorities.

A sizable portion of US culture idolizes self-reliance and independence. So, prioritizing gun ownership is consistent with that. The other side of this ethos is looking down on those who must be given services rather than "earn" them. Similarly, a sizable segment of the population pays taxes or paid taxes during their working lives and is angry when people receive benefits that they had to pay for. This anger is exacerbated by the preponderance of earnings cliffs, systemic fraud, and lack of oversight.

because the US is better at marketing an idealized (and false) version of its culture to the world than other countries

Of course, not. US became a top destination in a very simple fashion which doesn't involve neither culture, no marketing: your cousin/friend goes to US, and writes back that there are jobs, and food/clothing is relatively cheap, and you think "aha!", and you are the next. And at some moment the whole community comes to the same realization, and now parents prepare their kids for emigration for better life. And it works even in countries where governments are very hostile to Americans, and promote the idea that US is the capitalist hell :-)

As more and more occur, you'll see this more and more.

From the article above.

"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."

For reference $5/day in 1914 is ~$15.62 an hour in 2018 dollars. The similarities likely end there. Unlike Ford, Amazon's hike is not twice the average wage of a fulfillment center employee. A manager at an employment agency recently told me that you can't hire someone for less than $15 an hour to work in a fulfillment center in Reno, NV. Reno is a major fulfillment/shipping hub in the US.

This post should have been titled "Amazon raises pay to keep up with market rates just like every other company".

I suspect other companies will have to match Amazon's wages. Walmart's employees are looking at Amazon and wondering why they don't get the same wages. This will become the de facto minimum wage at least in retail. This is good news overall.

What Amazon is doing is building a moat to protect themselves from competition.

Amazon has achieved a scale where they have driven down their cost of business per product sold as low as they can. Only other companies operating at a similar scale can compete. By increasing the cost of doing business for smaller competitors that don't have their scale, they are dramatically increasing the cost of anyone else doing what they did to get where they are.

I'm sure Jeff feels good about this more. He can be rightly proud of it. He's managed to build a business successful enough that he can afford to do it. However don't lose sight of the fact this is also a shrewd and actually pretty aggressive business move.

It's truly surprising to me how many people took this announcement at face value. I personally recognized the ruthlessness of it almost immediately. It was seared into Jeff Bezos' quote - "We're excited about this change and encourage our competitors and other large employers to join us."

Says everything right there.

Ford's move was because he had difficulty attracting and retaining workers for boring assembly line work.


> At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford's turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.


Came here to say this.

His factory needed a stable workforce, more so than most at the time -- because one screw-up could stop the line. And he was willing to pay for this. Hire the most stable, least-drunk, workers around.

Of course he wasn't above some good PR, either. (And this was also the era when you could get a patent on a perpetual motion machine, right?) He'd be thrilled to see his PR quoted uncritically a century later.

This shift to more stable employment wasn't all gravy, by the way. In a factory town where the average guy keeps a job for a few months at a time, a recession means that it takes him a bit longer to find the next job... everyone's looking at the same time. But in a factory town where the average guy keeps his job for decades, layoffs are much more serious. Which is part of why the "great" depression gets this adjective in out memory, and others don't.

To add to the discussion, and your mention of boring assembly line work, a valuable quote (that occurs several hundreds of pages after the pin factory observation) from Smith's Wealth of Nations, written in 1776.

> The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding,or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become.

> The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgement concerning many even of the ordinary duties of private life. Of the great extensive interests of his country he is altogether incapable of judging; and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war.

> The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance, in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless the government takes some pains to prevent it.

Vehicle production lines are now heavy users of automation, and workers skilled not only in assembly, but in process improvement, scrum, lean. Not simply being manual workers is to Amazon's benefit, as it was to Ford for he recognised the impact an individual worker had on the end-to-end production; embodied in concepts like TPS, lean, six sigma, but with long histories.

and thus grew the middle class. The middle class is something we truly need to focus on growing again.

> and thus grew the middle class. The middle class is something we truly need to focus on growing again.

But that's the problem with things like this. We keep focusing on the top and the bottom but not the middle.

So we pass laws purporting to tax the rich (but really anyone with a full time job) and then the rich hire accountants and only the middle class pays. Then we clamor for a higher minimum wage, but the middle class already makes more than minimum wage, so the effect on them is to raise the prices they have to pay.

What we need isn't just to get the people at $10 to $15, it's to get the people at $20 to $35 or $50.

>What we need isn't just to get the people at $10 to $15, it's to get the people at $20 to $35 or $50.

Exactly. $10-$15/hr is absolute bare minimum to SURVIVE now unless you live in an extremely rural area. $15/hr is coming too late.

It would help enormously if we had walkable communities with cheap rentals where a single person could reasonably support themselves on local minimum wage. The dearth of affordable housing -- by which I mean market rate cheap rentals, not government subsidized housing -- is a huge factor here in growing a permanent underclass and undermining the growth of the middle class.

I wouldn't expect prices to rise significantly as automation kicks in. We will see a lot of competition and wage stagnation for those middle class jobs as efficiency eats away the margins they live on. Hopefully we find a solution before the pitchforks come out.

I submit that we have just focused on the top in terms of systemic gov't policy.

income in excess of $5million/yr taxed at 91%.

Where is that money coming from?

If they are worth that price, people will come up with the money. We aren't talking about charity here.

America has always been a nation of middle class people, even back in colonial times. The exception was the southern slave economy, which didn't have much of a middle class.

it's a pretty big exception, even if the other part is true. (And thanks for acknowledging the exception up front!)

At the high points, 20% of the total U.S. population were enslaved. At that point, it's not just an exception, it's a problem with the entire premise, even if the entire rest of the population was 'middle class', which they weren't.

What allowed the U.S. economy to function with an unusually large portion of _white_ people being "middle class" (compared to Europe)... was all the African people who weren't. There's no reason to treat those 20% of people as not part of the U.S. economy, they were a _crucial_ part. If we were to look at what portion of the _entire_ population of the U.S. was "middle class", including those 20% enslaved people, for whatever definition of 'middle class', that'd be closer anyway. There's no reason to look at things without them though, as if they were just a footnote. 20% of the population!

That 20% was in the slave economy of the south. The north did not have slaves, and the middle class was in the north.

It's 20% of the population of the entire country. It was probably much more than 20% in the South, indeed (in some states as high as _65%_ enslaved people at some times!), and less in the North. The North did originally have some enslaved people.

The economies were clearly related.

The severing of the economies at the outset of the Civil War, and the total destruction of the southern economy during the war, yet the continued prosperity of the northern economy shows that the northern economy was not dependent on slaves.

> The North did originally have some enslaved people.

Yes, and the ending of that did not retard the economy or reduce the middle class in any detectable way. The middle class increased throughout the 19th century.

Slavery was integral to the entire U.S. economy, but that economy was changing in the mid-19th century, and indeed it's not totally false that those economic changes were part of what led to the civil war.

// Capitalists in the North profited by investing in banks that handled the exchange of money for people, or in insurance companies that provided insurance for the owners’ investments in enslaved people. So did foreign investors in Southern securities, some of which were issued on mortgaged slaves. The hotbed of American abolitionism — New England — was also the home of America’s cotton textile industry, which grew rich on the backs of the enslaved people forced to pick cotton. The story of America’s domestic slave trade is not just a story about Richmond or New Orleans, but about America. //





"“In the decades between the American Revolution and the Civil War, slavery—as a source of the cotton that fed Rhode Island’s mills, as a source of the wealth that filled New York’s banks, as a source of the markets that inspired Massachusetts manufacturers—proved indispensable to national economic development,” Beckert and Rockman write in the introduction to the book. “… Cotton offered a reason for entrepreneurs and inventors to build manufactories in such places as Lowell, Pawtucket, and Paterson, thereby connecting New England’s Industrial Revolution to the advancing plantation frontier of the Deep South. And financing cotton growing, as well as marketing and transporting the crop, was a source of great wealth for the nation’s merchants and banks.”"


Not sure where your drawing your data from the US does have a large working class population and always has had.

Up in the hollers you can still find some very poor working class people and its noticeable that the forces recruit from these populations (this is from conversations with USAF personnel)

So the original proposition was that "America has always been a nation of middle class people, even back in colonial times."

I'm not sure exactly what they meant. i'm not sure if "middle class people" and "working class people" are the same thing. I'm not sure if a "large working class population" contradicts "a nation of middle class people."

I interpreted the original claim as suggesting that the U.S. had _more_ "middle class people" than European nations, and had much much fewer people who were not "middle class people" compared to contemporaneous European (or other) nations. I am not sure how we define "middle class" or compare the U.S. and Europe "even in colonial times". I am sure that enslaved people were not "middle class" though.

But where I found my data that at some points ("colonial times " and shortly after) up to 20% of the entire U.S. population was enslaved people (who were obviously not "middle class" and to me present some serious problems with considering the U.S. at those times "a nation of middle-class people") by googling, and finding this: https://faculty.weber.edu/kmackay/statistics_on_slavery.htm

The last line is total U.S. population. We can see that in 1750, 934,340 (white) + 236,420 (black) = 1,170,760. 236,420 / 1,170,760 == 20.1%. "colonial times". 1790, specifically breaking out free vs enslaved Black people now, also roughly 20% of the total population was enslaved people. The percentage starts to go down after that, by 1860 down to "only" 12%, which is still enough people who are clearly not middle class that I'm not sure I'd want to call it a "nation of middle-class people".

Talking about a "US economy" in the antebellum years is like talking about a "European economy" today. There were vast economic and social differences between North and South because they followed fundamentally different economic models.

The USA has decided 3 times to create a middle class. By enacting massive transfers of wealth. Most recently the New Deal.

Wealth and Democracy: A Political History of the American Rich by Kevin Phillips http://a.co/d/glFxd7G

That the rich get richer is just math. Without deliberate wealth redistribution, growing inequity is inevitable.

Gross inequity and democracy are incompatible. A democratic society must balance capitalism and socialism to survive.

The USA has always had a middle class. It never decided to create it, it just naturally happens in a free market.

Is the middle class currently growing, shrinking, or neither?

It's shrinking by your definition, growing by others (the poor of today are the middle class of history if you look at poverty levels, purchasing power, or class mobility).

Further, we are in a noticeable amount of ways not a free market. If I took my car engine (the free market) to a mechanic and said "It's not working after I just made a couple of random small changes to it", the mechanic would rightfully laugh me out the door because me just meddling with a complex system, even if its only a small amount, can have disastrous side effects.

Those making $200k-$500k are the new middle class. Are you making that much but only own one house? Are your cars more than 5 years old... Ding... you're in the middle class.

You're a whole order of magnitude off the _median_ income of the United States[0].

It sounds to me like you've got valley-vision. Time to travel and see the world, or at least more of the country you live in.

0: https://en.wikipedia.org/wiki/Household_income_in_the_United...

$200k-$500k is a massive range, and $500k is certainly not middle class. That's above the 95th percentile even in the San Jose area[0].

Just because you have to think about money sometimes doesn't make you middle class. Your neighbors having more money than you also doesn't make you middle class.

[0] https://www.mercurynews.com/2018/02/15/income-inequality-in-...

I don't understand why frugality means you're middle class. I also don't understand how $200k-$500k, a very sizable income, even in the SF bay area, is magically the middle class now

$200-500k in the SF bay area is still considered middle class because housing prices have gotten so ridiculously high.

The 2 br, 1 bath, 800 sq foot apartment I live in 3 years ago for $900/month would probably be $2,500 in SV. Likewise, the 1850 sq ft, 3 br, 2.5 bath house I live in now that I bought for $338k in 2015 would probably have been over $1,000,000 in SV.

$200-500k in the SF bay area is still considered middle class because housing prices have gotten so ridiculously high.

No, that means the middle class can't afford to live in SF. This isn't the first time I've heard this, and I don't know why anyone might think this. As a more extreme example, "middle-class in Pebble Beach is $1MM/year or $20MM net worth". No, there is no middle-class in Pebble Beach, only rich people live there.

I know I'm moving the goalposts here, but the houses in Pebble Beach aren't exactly middle-class houses, and not because of the price. A 4-bedroom, 7-bath, 5000 sqft house just isn't a middle-class home.

It's why I try to define "middle-class" by specific behaviors and possessions, not by dollar amounts.

No, it’s not middle class.

If you recently bought a $1M plus condo in SF, you are most certainly upper class. I don’t care if it was a 2 bedroom apartment.

It's not about dollars. It's about your behaviors. Behaviors of the middle class. Middle class people typically do things like own one home, work two jobs, save for their kids' college, keep their cars for a while, etc.

> work two jobs

I wouldn't consider working two jobs to be middle class unless you meant two people in the household working one job each, unless there are a lot of people working two jobs to maintain a middle class lifestyle.

The whole lower vs middle vs upper class split is mostly a fraud. People I've had discussions with about their class in that respect are usually trying hard to make an already meaningless definition make them look great. People who work jobs like mine are always "upper middle class" in their mind.

I wanted to back you up in that you are right that it's behavior that defines classes. But it's more the part that matters, your means of producing wealth. If your money works for you or employs others to work for you, you're investment class or capitalist class. Punching a clock, or picking up a salary check means you're working class. The third class are those who slip below maintaining employment, I call them "capitalism's reserve army" but there's probably a better term for the unemployed.

These little ego boosting distinctions people come up with "upper working class" are meaningless.

Middle class isn't working two jobs. If anything, it is a couple working one job and the partner doing their own thing: raising kids, personal project, community work.

No its social status you can be a poorly paid academic/scientist and are middle class but say a train driver on 80k a year will consider themselves working class

Yes, but location matters. If you have the common middle class trappings in SF, you are upper class, not middle.

Hell, if you have a lawn in Sf you are super wealthy.

Or your parents where hippies in the 60's and you inherited a property.

Side note: that’s a relative bargain compared to Manhattan.

A 700 sq ft 1 bed/1 bath can easily be $3,000/mo in a desirable neighbourhood such as the East Village. A nicer doorman condo somewhere like Flatiron or the Upper West Side can be amywhere from $10k/mo to $30k/mo for 1000-1500 sq ft (or $3m to $5m for purchase).

And here I was thinking that SF or SV was expensive...

"living at the edge of your means" is not the same as "middle class"

> $200-500k in the SF bay area is still considered middle class because housing prices have gotten so ridiculously high.

$200k-$500k of probably most often part of the classical capitalist-society middle class (petit bourgeoisie) in most of the country, though in some cases it will be high income proletariat (possibly proletarian intelligentsia), but at that level you are probably either driving a substantial share of your income from labor or forgoing income worth a substantial fraction of your current income by avoiding wage labor, so probably not the classical capitalist society upper class (pure capitalists / haut bourgeoisie.)

Depends on location.

In the Bay area? Sure.

I live in suburbs outside Portland, OR. My wife and I together make about $150k/year. We both own cars less than 3 years old. We only own 1 house, but we take a 2-week vacation a 1-week vacation every year.

Sounds like middle class to me

Oh yeah, absolutely. I consider myself the quintessential middle class.

My point was that kidsnow said $200-500k is middle class, but it really depends on location. It often feels that the majority of people on Hacker News are living in a Silicon Valley bubble. They talk as if $1,000,000 for a 1500 sq ft house is normal, as if $150k is decent entry-level wage, and...you get the idea.

$200-500k is middle class for Silicon Valley, but the higher end of that range is definitely upper class where I live.

the SEC uses income thresholds of 200k for an individual and 300k for joint (two years in a row). Should people in the middle class be able to invest?


Certainly, but they'll be working in trades of a couple thousand or tens of thousands.

If you have an investment account (That isn't a 401(k), 403(b), Roth IRA etc.) with hundreds of thousands that didn't happen from a single lucky investment (Like buying Apple or Amazon 10+ years ago), then you're probably more upper class.

Myself, outside my 401(k), I don't have any investments, mainly because I'm more concerned with eliminating my debts than taking on risks beyond my retirement account. But my wife and I make "only" $150k. If we made 300k, I might have some investments.

Again, though, we need to stop focusing on specific dollar amounts, since cost of living varies so wildly around the country. Get out of the SF Bay bubble.

Income is not wealth

Middle class is really defined on what you can get for your money, not a raw dollar amount. Quality of life and all that.

Why do most people react to this as this was a gift from Amazon, when in fact it was organized by workers and a demand they won?

If anything this was a concession from Amazon, because Amazon workers were supporting a bill against Amazon, which probably had more in store for the company than just a minimum wage raise.

It's a great thing, that motto, but creatively employed, it can also produce company towns with "company stores" that accept scrip payments.

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.

He is going to lay off all of the employees through automation. You can have $150 an hour for warehouse employees as a minimum wage if there is only one of them.

Why would he bother raising wages then? No need for him to raise wages to do that. He isn't doing it for the sake of it. There is some other incentive involved. Automation happens either way and they have been gradually doing it for years without raising wages significantly.

To stop a union from being formed. Unions often institute work rules that contractually forbid automation.

This would be bargained between management and the union and is not automatic. Maybe it's a threat but not necessarily an issue Amazon would face even with the formation of a union if this is something Amazon really wanted to keep out of a contract.

At the end of the day both the company and the workers/union have to agree on the terms and people may not be willing to strike over this single issue if the rest of the deal was good.

There are plenty of other reasons for Amazon to want to prevent a union from forming including increased pay, benefits and time off but a union's ability to prevent automation may not be huge issue as Amazon is still growing and hiring workers faster than the jobs are being automated.

Doesn't automation eliminate the need for negotiating with a union?

> Doesn't automation eliminate the need for negotiating with a union?

Not if the union literally forbids you from introducing automation in the first place. This is how the Transit Workers Union prevents the MTA from using technology that's been standard across the industry for decades.

An alternate strategy is to require the employer to pay the union when new technology is introduced. This drives up the cost of technology to the point where it costs more money than simply hiring the manual labor, thereby preserving the union jobs (at the cost of the taxpayers, in the case of the MTA).

Could you share some reading material about your MTA example? I've never heard that before.

> Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show.

> The critics pointed to several unusual provisions in the labor agreements. One part of Local 147’s deal entitles the union to $450,000 for each tunnel-boring machine used. That is to make up for job losses from “technological advancement,” even though the equipment has been standard for decades.

...and so forth. https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...

The TL;DR is that the L (and soon 7) line is automated with something called "communication-based train control". They still have an operator and conductor on every train, even though the train is perfectly capable of driving itself and making station announcements itself.

I think the MTA thought they could kill off the conductor's position when the trains were fully automated, because the operator could take on the conductor's role now that they don't have to actually operate the train. The union did not allow that.

In the end, this is not really the MTA's biggest problem. CBTC was supposed to increase capacity on the L, but it didn't in reality because the MTA doesn't own enough rolling stock to actually offer that capacity, and the terminals on the L don't allow them to turn trains quickly enough to make the signalling system the bottleneck. (The 7 will be better, though, as at least the Hudson Yards terminal has tail tracks that allow the trains to enter the terminal at full speed. The same cannot be said of 8th Ave. on the L, where trains have to crawl into the terminal because the track ends a few feet after the end of the platform.)

> CBTC was supposed to increase capacity on the L

This is not strictly true. CBTC was put on the L first since, at the time of procurement in 2004, it was an ideal testbed as a moderate-ridership, fairly long line isolated from the rest of the system.

It was not immediately obvious that the L would become the center of gentrification in the late 2000s and 2010s; in the '70s and '80s it had such low ridership that they were proposing its closure. So they only ordered enough train cars to meet the 2004 ridership demand.

Why did MTA agree to it? They were involved in writing and bargaining the contract too.

I doubt a private sector union at Amazon would have the power to get such a deal.

One thing that comes to mind is the union saying that clause is a dealbreaker, and being willing to strike unless it's included.

In New York, public-sector unions are not allowed to strike; instead both parties are forced into binding arbitration. https://en.wikipedia.org/wiki/Taylor_Law

According to an arbitration decision in 2010, it sounds like the MTA strategically withdrew an OPTO clause specifically to get less hammered by labor on other issues during arbitration: https://www.scribd.com/doc/18552062/The-M-T-A-and-T-W-U-Arbi...

Only if you can automate everything at once

Uh, good publicity? A cheap way to wash off his name? (the attitudes I see about him in Seattle are surprising, even to me, even after being here a while). A great way to buy good publicity before steadily reducing your workforce through automation over the next decades as is surely the plan?

Bezos has shown few, if any, signs of altruism and the one instance I can think of would be roughly the monetary equivalent of me giving a homeless person a penny.


Summary: the raise in Amazon's wages isn't just something that happened. It's part of a lobbying push for a higher legal minimum wage. Amazon's outsized profits-per-employee, compared to other retailers, mean that raising the minimum wage will hammer competitors.

He's making too much in nominal profit and needs to put money somewhere productive. Today, that place is his workers' wages.

"Bezos wouldn't do this unless he saw a benefit for the business or his hand was being forced somehow."

I don't like this type of knee-jerk suspicion towards people running corporations. Don't forget that they have conscience too, and can make decisions for the better or for the worse. In fact, by not giving credit where credit is due, you disincentivize them from trying to do good things.

Yes, business people need to make hard decisions to stay competitive, and yes, they have an obligation to their investors to make a profit. But these investors are people as well and might be proud of owning the stock if the company makes positive decisions. Further, if there's a certain amount of leeway that is afforded a very successful company to do something like this, but still stay competitive, then capitalism doesn't force that person's hand.

I'm sure the full fallout of such a policy has been considered and it wasn't made impulsively. But immediately dismissing altruism as a partial motive is unfair and sets a bad precedent.

I don't think it's a "knee-jerk" suspicion. It's from experience and knowledge that companies don't generally behave altruistically. Amazon historically has not acted altruistically. There is a considered business reason for this and I was trying to understand it. Suggesting that they likely have a strategic reason is in no way "knee-jerk".

We've seen that its easier to act altruistically once you're a billionaire. I think there can be an element of that - but why lobby to force other companies to do the same?

If you think that conditions in your group would be substantially better off if everyone in the group did a certain thing, you're likely to both do that thing and advocate that others in your group do that thing.

Pretty sure it was in response to Bernie Sander's BEZOS bill

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.

So once competition is gone what happens?

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

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.

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

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

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.

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.

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.

Agreed. Capitalizm works best when the incentives are not all in one direction. It appears in this case some other incentives are at play be they looking for good PR, the threat of workers organizing or government regulation. It helps when the workers have some leverage on their side.

It's like the complement of flooding the market with cheap goods. You can similarly hog up some resource that your competitors also need, driving up its price. E.g. labor. Force competitors to sell cheap, and/or pay more for inputs.

Totally a response to Bernie Sanders campaign against Amazon, and impending unionization.

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.

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

I thought it was funny that Bezos, who isn't a super frequent tweeter, responded to Bernie Sanders' congratulations to him on the same day that this was announced.

[1] https://twitter.com/JeffBezos/status/1047152109508997121

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

It's not just about signed laws. It's about pressure from many angles. I doubt Bezos liked Bernie's bill that was literally called Stop BEZOS. I doubt Bezos enjoys continuous media coverage saying Amazon workers need food stamps to survive. I doubt Bezos wants to be shamed in public by activists while eating out or something. All these add up.

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-... (Internal RNC Poll: Complacent Trump Voters May Cost GOP Control of Congress)

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

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

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

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?

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

Trump is already going after Bezos because of Washington Post and is still pushing a populist platform so there's no reason to believe that he would get in a way of a bill that targets Amazon.

If you allow a populist sentiment freight train to build against you, you have already lost.

We have all been paying attention; which is why a dude who never even won an election as a dog catcher is now President of this still great Nation.

And the dude who lost because of a corrupt DNC just forced the wealthiest company in the world to raise the pay of hundreds of thousands of its employees (while also incentiving Amazon to force wages up for workers at other companies) with a marketing campaign. Interesting times.

And the non-dog catcher has sent the stock market into the stratosphere.

Yes the DNC was corrupted; yet all we hear on some cable stations is how the non-dog catcher is a Russian plant.

Interesting times indeed.

I saw it as an issue that both progressives and conservatives would eventually agree upon. Amazon is an extremely easy target to focus upon when it came to wage issues.

It doesn't really matter who owns the White House in 2020. This issue wasn't going to go away.

> No democrat is getting any substantive bill through Congress and signed into law until 2020

Not sure whether you meant 2019 or 2021, but 2020 is a fairly nonsensical date given when Congressional and Presidential terms start, unless you assume that Trump would become malleable in a lame duck session after losing reelection or something of like that not tied to term starts.

Assuming a Democratic majority in at least one House of Congress resulting from the 2018 midterm election next month, 2019 would be more likely than 2020 or 2021, because necessary funding bills are a powerful lever for substantive non-appropriations legislation.

2020 is not far away, especially in time scales of US Politics and mega corporations like Amazon... 2 years may as well be tomorrow.

Anecdotally, most 30 - 35 y/o and unders I know have Prime or live in a household with Prime. Mind you, not all in that demo are pro-Bernie but that target certainly skews that way.

Bernie vs Amazon? I can't imagine Bernie having a chance. Prime will trump Bernie.

People can use a service and then vote to regulate that service, believe it or not.

Yes they can. Yes they do. None the less, Bernie will have to fight the fight of his life to beat Amazon. Demonizing "free shipping" is no easy task.

I don't think he's getting enough credit for this.

Well also because they are going to automate all those warehouse jobs anyway, and brick and mortar competitors cannot automate retail workers, and this will hurt them even more in the future.

>brick and mortar competitors cannot automate retail workers

Actually, Amazon is looking to do just that with Amazon Go: smart speculation is that they plan on developing it to the point where they can license and sell it to other retailers in much the same way they did with their cloud services.

> - 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)

On the other hand, their stock is currently down by ~$30/share (~1.5%) following the announcement.

Despite all the bravado, Wall Street are a bunch of pussies. __Any__ change makes them nervous. They have a natural predisposition to over-react. Let's give it a couple days or a couple weeks. Once WS makes up and realizes their options are limited, that Amazon still have plenty of upside, the money will come crawling back, as its done before.

So, time to buy?

You joke but probably yes. Amazon can afford to raise wages because it's still slowly strangling old-world retail and absorbing the business they used to do. The raises don't change that.

The wage increase also means more money to spend at...wait for it...Amazon. There's just no way this #15 p/o was pulled out of thin air. They have more data than God, as well as the tools and people to analyze it.

And they are preventing a union.

Why do you keep putting a - in front of your percents? Is it a -25% PR hit?

Attempt at a bullet list.

  - indenting by 2 sort of works
  - until the lines get long and don’t wrap

You're clearly right. I added newlines so the list works.

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?

>Amazon's starting pay varies by location — $10 an hour at a warehouse in Austin, Texas, for example, and $13.50 an hour in Robbinsville, New Jersey. For 2017, the median Amazon employee earned just under $28,500, according to company filings.

From the CNBC article: https://www.cnbc.com/2018/10/02/amazon-raises-minimum-wage-t...

For information in the UK (Milton Keynes) for a Fulfilment Associate its.

• £8.20 per hour (days) to £10.16 per hour (nights). Rising to £10.50 per hour (days) to £12.46 per hour (nights) from November 1st 2018.

• Overtime rates between £12.30 per hour and £16.40 per hour. Rising to £15.75 per hour to £21.00 per hour from November 1st 2018.

If anyone's interested, in Poland it's the equivalent of $4.50-$5/h, depending on the location.

For what it's worth, someone on reddit says $12


It's lower than $12. This job posting lists $10.50 and up for a warehouse position: https://www.linkedin.com/jobs/view/881584480

Quick back-of-the-envelope math:

Let's assume this raise will affect 250k workers this coming holiday season, bumping their pay from $12 to $15 (+$3).

Over 12 weeks at 40h/week, this represents an additional $360M in labor cost.

Using AMZN's 2017 revenue of 177.9B, this equates to 17.7 revenue-hours.

Why are you comparing 12 weeks with the entire 2017 revenue? You'd have a better argument that this is peanuts for them if you'd make a fair and clear comparison.

> Why are you comparing 12 weeks with the entire 2017 revenue?

They aren't. They're comparing to revenue per hour. It doesn't matter what period of time you calculate revenue per hour with, you always get the same number.

They're comparing 12 weeks of warehouse work to revenue per hour. Why twelve weeks? It still makes no sense.

Just trying to put some reasonable bounds on this estimate. I assumed 12 weeks is "the holiday shopping season" where Amazon has a lot of extra workers who would benefit. And I guessed 250k of them getting $3 raises. You could also guess at the total cost in other ways, many of which would be superior.

The overall goal of these lazy estimates is to understand how significant a cost this is for a company like Amazon. Could activists have hoped for more? Are other companies, for whom the costs would be felt quite differently, likely to offer something similar?

You have to use some amount of time to get a number measured in dollars. What amount of time do you want to use?

Think of it like this, 12 weeks of extra labour cost is offset by 17.7 revenue hours, you could also say 1 weeks extra labour cost is the equivalent of just under 1.5 revenue hours.

12 weeks is (approximately) a business quarter. Corporate finances are most commonly aggregated across a quarterly schedule.

I'm not making the argument that this is peanuts. Maybe it is, maybe it isn't. I'm just trying to get some perspective on the scale here, relative to other things vying for the time and attention of Amazon's management.

so multiply the number by 4ish to get the whole year?

In any case, it's not clear that revenue hours is a meaningful comparison anyway because it ignores how much of their cost is labor vs anything else.

Looking at revenue is completely meaningless. You need to look at margins to see the effect on a company. Imagine you take a loan of $1000 to buy $1000 of gizmos and then sell them to me for $1300. You don't have $1300, you have $300 after covering your overhead costs. And in the case of Amazon you have far more overhead costs than just the costs of goods. And the government also attaches significant tax increases when you pay employees more -- paying an employee $10 more is substantially more than $10 in cost to the employer.

Amazon's 2017 financials showed a final net income of $3 billion. They do reinvest aggressively in their company so a fair chunk of their costs are going to be 'voluntary', but that voluntary expenditure is the very action creating all these jobs. In any case, this is going to be a very substantial cost to them.

What's your point? That a worker, of any position or skill level, should make a salary proportional to their employer's revenue?

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?

If you criticise the entire system, it's pretty hard to identify a point of change that people will actually rally behind.

If you specifically target a few of the more infamous culprits, by getting them to adjust you can establish a precedent and build from there. This move probably isn't going to win Bezos any new fans, but there'll probably be a reshift of focus towards some of the similarly bad employers.

One possibility: the economy has a surplus of people who are looking for unskilled warehouse jobs, so even if other places had better quality, it was difficult to switch.

I'm guessing for many people an Amazon warehouse job is stable employment near their small town that might not have many opportunities otherwise. Lots of small towns on this list and I can't imagine all of them had a booming economy before Amazon showed up. I'm not saying it's right to abuse your workers but $10/hr goes a long way in some places. It's not the same as working in a coal mine but it has some similar themes: small town, crappy job, relatively good pay.


>I'm guessing for many people an Amazon warehouse job is stable employment near their small town that might not have many opportunities otherwise.

Not with the 2nd highest turnover of all Fortune 500's.


Well most fortune 500 companies don't have large numbers of minimum wage workers.

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.

A year ago Target pledged to increase it's starting hourly wage to $15/hr by 2020. Currently starting pay is $12/hr

Source: https://corporate.target.com/article/2017/09/minimum-hourly-...

> the employees were free to quit and work at other similar positions in similar companies

If you think that's true, you've never been an under-educated person living in a small town.

I think many of the problems of the world come from lack of perspective. If you have never seen first hand how difficult it can be to live without education, how hard it can be to get education in the first place, how could you really understand. I guess it's easy to say the poor aren't working hard, or smart enough, but how can they be expected to do so when the tools to achieve have never been presented to them.

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.

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.

> 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.

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.

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.

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.

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.

Worker protections have been going down in our longest bull run ever. Just recently the Supreme Court ruled that forced arbitration was legal and we are at some of the highest profits and productivity ever. Those protections weren't going up during the boom cycles in the 90s either.

I'm not sure your hypothesis fits reality

> Worker protections have been going down in our longest bull run ever.

Affordable Care Act (and subsequent non-repeal), disclosure requirements for executive pay ratios, very long list of state-level measures (which is where most of this actually happens in general).

This is just 2018: https://www.littler.com/publication-press/publication/ready-...

The current era is also a bit odd because Wall St. and a handful of megacities are booming but real wages in general haven't risen much, the rust belt is still falling apart, suffering from the opioid epidemic, etc. So it's not that surprising to see lots of new labor laws in places like California while other places are more worried about saving local businesses.

> Just recently the Supreme Court ruled that forced arbitration was legal and we are at some of the highest profits and productivity ever.

There are always counterexamples, and that one is from the courts rather than the legislature.

> Those protections weren't going up during the boom cycles in the 90s either.

Arbitrary sample of state-level changes (1990 and 1998), BLS has the whole set if you're interested:



I find your examples as arbitrary. Just look at the results. If labor rights were increasing they'd be able to pull more compensation due to a better negotiating position, but real wages are falling. Look at the right to work movement and at will employment.

Hell, I gave less than two weeks notice at my last job and was privately approaches by multiple coworkers asking me if I was worried about the company black listing me. When we have companies lay off/fire people though, no one bats an eye at them being immediately walked out the door. Stating that labor rights have been going up just seems willfully ignorant based on the actual results in the economy

> Just look at the results. If labor rights were increasing they'd be able to pull more compensation due to a better negotiating position, but real wages are falling.

That's just assuming the causation goes the other way again. If the labor rules instead are pricing smaller businesses out of the market leading to business consolidation that gives capital more power over labor, you would expect just what we see.

It also doesn't make a lot of sense to expect a lot of labor laws to increase wages regardless. If you pass a law requiring maternity/paternity leave, that benefits the employee but raises costs for the employer who has to find and pay a temporary replacement. The expected result of that is to suppress wages rather than increase them -- the money has to come from somewhere and most businesses don't have huge margins.

You can be a free-market capitalist and also realize that corporations are superorganic entities that, like their organic components, don't always make the "right" decision when faced with a choice between mutual gain and zero-sum thinking. Empirically, the argument that raising the minimum wage would close these warehouses has an extremely low prior probability. Amazon's warehouses exist where they do because Amazon's customers exist where they do.

> Empirically, the argument that raising the minimum wage would close these warehouses has an extremely low prior probability. Amazon's warehouses exist where they do because Amazon's customers exist where they do.

That determines the region, not the town. Equalize the labor cost and the optimal location may move significantly, e.g. to border the city from a different side. It would tend to move it from an area with low labor costs to an area with higher labor costs (and therefore cost of living) but closer proximity to customers or transport infrastructure. And making 50% more in a town with double the cost of living is no raise.

If as a society we agree that companies have a moral responsibility / obligation to pay their employees a wage that provided X, Y, Z your analogy would make a lot more sense.

In America at least, we do not have agreement.

Says you.

I imagine one reason Amazon is getting a lot of heat is because its stock is appreciating, Bezos is by far the world's wealthiest man and it's easy to claim that he and his fellow shareholders are getting rich of the backs of the workers. Walmart has gotten a lot of criticism over the years for the same reason. The fact that both retailers have a ton of workers also means there are plenty of hard luck stories to tell. In Amazon's case I know of at least one rather interesting book (Nomadland) to come out of stories about the camper communities that spring up around Amazon fulfillment centers.

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

I'm not sure, but I think most places are OK with bathroom breaks. I could be wrong, though.

If so, why didn't the employees change jobs? See, this is much more difficult. If the Amazon warehouse pays more than other jobs around - even if the pay is still low - it makes it much more difficult to leave the job. You still need food and electricity and so on. The same sort of thing happens if an employer pays less, yet offers things like decent, affordable health insurance (or health insurance at all). To leave a job simply because of working conditions is a position with a bit of leeway.

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

It isn't directed only at Amazon, but large employers. I'm not sure why some of the anger isn't directed elsewhere, though. I'm not sure it is fully capitalism's fault, but more of lack of laws protecting folks from capitalism alongside adequate enforcement of those laws. It is easier, however, to direct anger at the company, who can change somewhat rapidly, rather than a government that is slow to act and rarely produces quality change for all.

>I'm not sure it is fully capitalism's fault, but more of lack of laws protecting folks from capitalism alongside adequate enforcement of those laws.

So what you're saying is...it's capitalism's fault?

Any government or economic system is bad when it is able to be abused by some of the players. Lots of these things are good in theory.

It is Ok to say that unrestrained capitalism is at fault, because that has led to this. Or capitalism that hasn't adjusted for the modern standards, perhaps.

Abuse is what is happening now, and the proper solution is laws to hinder such things. If it were up to me, a lot more places would be a socialist democracy with a thriving capitalistic sector.

"I'm not sure it is fully capitalism's fault..." I agree. The problem here isn't capitalism. I also don't think it's lack of laws, it might be the opposite. People being abused by corporations who have manipulated laws in order to favor the corporations. Things such as "forced arbitration clauses", "anti-union legislation", and "non-compete clauses" are meant to strip the power away from workers. That we blame any economic system ignores the fact that humans are the root cause of any and all injustices in the systems we implement.

_People_ are responsible for implementing the system and handling all of the problems with said system. We can't get around this. All systems have pros and cons. Pointing this out is akin to saying, "Water is wet." It's how people decide deal with those cons once a system hits reality that cause injustice in the system.

Whoa! not all of them are individual people's fault. There's still problems with the system itself including tyranny of the majority, systemic bias, inflation and recession to name the first few that occur to me.

Per marxist theory (so take this how you will), modern societies can either be dictatorships of the proletariat or of the bourgeoisie. Capitalism as an economic system is inherently a dictatorship of the bourgeoisie, where laws will always be created to favor the interests of those with capital rather than workers. A market driven economy isn't inherently capitalism, as markets existed before capitalism and certainly played a factor in the central planning organizations of many socialist governments.

Any concessions to this only come from fear that the bourgeoisie would lose further power, which explains why the rich historically supported the expansion of the middle class as it created a buffer between their interests and the interests of laborers, and would explain why Jeff Bezos would support a living wage now as without it there is an increased risk of having to make further concessions down the line.

Well known target.

You're ignoring a major component - Warehouse jobs are likely location-dependent and switching incurs other, not obvious costs. Targeting all of capitalism is a good idea, but one that is pretty hard to change.

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


Because it doesn't make any sense. Amazon doesn't dominate the jobs market.

Depends how you look at it. The fulfillment centers are intentionally built out in the middle of nowhere where land and labour are both plentiful and inexpensive.

If you live in such a place and Amazon is your employer, it may well be the case that you don't have a lot of other options, especially if what you came from was being on social assistance.

So now they will have an even stronger foothold in the depressed areas that they provided people with jobs. EMTs, teachers, etc are going to start taking jobs the Amazon because it pays better.

>I'm guessing for many people an Amazon warehouse job is stable employment near their small town that might not have many opportunities otherwise.

If they do their research, they'll realize they probably won't have a job for that long [1] and it would be preferable to stay in a position (that likely pays better with your examples) that is reliable.

[1] https://www.ibtimes.com/amazoncom-has-second-highest-employe...

Land may be plentiful in the middle of nowhere but labor wouldn't be. Middle of nowhere is usually sparsely populated, that's why it's middle of nowhere.

The flip side of that is workers in sparsely populated areas are willing (and more able to) commute farther for work.

True, but given pretty hard cap on commute speed, I don't think it changes much. It's not unheard of to commute 50 miles to work now in the Bay Area (it's basically San Jose to San Francisco), how much more you can do in the middle of nowhere - double? I don't think many people would drive 3 hours there and 3 hours back every day.

No they are built near transit hubs, out in the sticks wont have a motorway running nearby as does the one nearest me

It may dominate (some) local job markets.

Depends where the warehouse is.

Because capitalism has nothing to do with it.

Surely "this trillion dollar company led by the world's richest man pays its workers peanuts" is a criticism of capitalism?

You don’t think people have been criticizing Amazon specifically? I think they have.

It's usually best, when criticizing something, to come prepared with concrete examples that demonstrate the issue you're talking about.

Here you go. I couldn't find anything that even registers in comparison to Amazon aside from Walmart.


That makes a lot of sense - there aren't that many companies that "even register in comparison to Amazon". On top of that, most of the other world's-largest companies to compare against aren't as labor-dependent.

(Meijer is a regional chain. Sears is nearly out-of-business. Using them as examples would fall flat.)

I didn't realize Meijer was regional. And I thought Sears would be relevant since this is over the last five years (I guess I'm not sure how long they have been on the cusp of dying). For some reason I was struggling to come up with other chains on the spot, but obviously anyone clicking on the link is free to add their own.

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

What's the point of criticizing capitalism if there are no viable alternatives?

The rather obvious reason (which I suspect you know full well), is that "capitalism" just isn't very specific.

Even believing that it is the best of all systems we've thought of (which I do) does not preclude one from optimising its specifics.

Who says there are no viable alternatives?

None that I know of at least. If you can think of any, feel free to list them.

My point being that Capitalism has only been a thing for less 300 years, and what we have now isn't even capitalism. It's a warped perversion of it thanks to the inflated influence of ideologues like Milton Friedman and Friedrich Hayek, and the politicians that bought into their narrow-minded dogma hook, line and sinker.

The worst damage they and their ilk did was to convince the entire political spectrum from the centre-left to the far right that there is no alternative to free market fundamentalism.

I don't have a tried and tested alternative for you, but the idea that there are no alternatives is ludicrous to me.

We just need to be actually looking for these alternatives, which the corporate world has no interest in doing and the politicians in their pockets merely continue the theatrics of fixing a system that blatantly isn't working for anyone but the amassers of capital.

And before anyone loses their shit because I'm criticising the plutocracy we have allowed to be built in our names, nor I'm not a communist; no do I wish for a communist system.

If your criticism of capitalism is that it's not pure and not perfect, it's a non-sequitur since there are no pure and perfect ideologies, not in economics and not in government.

I'm reminded of that comic with the cats on trial. Capitalism sucks in many ways, but it sucks a hell of a lot less than the alternatives we've tried. Same with democracy.

I'm not going to stop criticising something just because I don't have a tried and tested alternative ready to go. That makes no sense.

> Capitalism sucks in many ways, but it sucks a hell of a lot less than the alternatives we've tried. Same with democracy.

And that's fine, but I'm not so narrow-minded as to accept that there are no alternatives. History is replete with people patching up broken systems in futility; all because they could see no other way than the status quo.

> they get such bad press for the way they treat their workers it only seems fair to laud them for this.

That's because they treat their workers terrible. They're a huge company with a lot of profit and how people at the bottom of the chain are treated is maddening. They're seen as an example of how not to treat workers (and for good reason).

They definitely should not be lauded for this: They did some calculations and projections which showed that raising the minimum wage brings more benefits (PR stunt, not being the target of new legislation anymore, etc) than downsides (now having to pay X more to some people).

I refuse to believe Bezos woke up this morning with a new moral sense to change the ship around.

Possibly worth observing: they bring in a ton of gross cash, but their revenue is smaller than a lot of Internet operations because their out-lay is high: physical storage, transportation, etc. are all expenses that Internet companies with similar profits don't have to shoulder.

In 2016, they made a profit of $857 million on a revenue of $30.1 billion--- i.e. profit margin of 2%, compared to Alphabet's 9.7% or Facebook's 36%(!!!). It's the number that investors care about, because it tells them how likely they are to get money back out of a business when the invest money into it. It's also a number the company cares about, because it tells them how much of a shock to their fixed costs they could stomach without suddenly finding themselves spending more than they make to keep the doors open.

Amazon's (relatively) razor-thin margins are what make the company so paranoid about costs like wages and benefits; they've seen America's history of burning hulks of older companies wrecked by making pension promises when profits were high that they couldn't honor when profits tailed off.

Profits don't tell the whole story though.

Imagine if you are Amazon. Do you take the extra billion dollars you earned this month and throw it into another warehouse and more growth opportunities? Or do you keep your size the same and use that money to raise wages?

It's more of question of how they are allocating funds. Either way, the "profit" stays the same.

Amazon has been focused on growth at all costs, and that meant keeping wages razor slim and reinvesting every spare penny.

The real question is: Will slowing their growth investments and paying their employees a fair wage actually help their growth in the long run?

That's the strategy that makes a company more flexible to market shocks. If your revenue is tied up in new buildings, you can react to market shock by decreasing your growth rate. If your revenue is tied up in wages, you can't react to market shock by slashing your wage budget, for (obvious) psychological reasons that half-constructed warehouses are utterly immune to. ;)

Amazon has never cared about net profit, they care about compounded growth through reinvestment of profits. It took Wall Street about 15 years to figure out they should leave Bezos alone.

That's why any company treats any of their employees well. Google isn't giving their employees all these perks out of the goodness of their heart. They give them to attract the best talent to make the most money. Amazon is doing the same thing.

that's the whole point of the job market. The dysfunction displayed by Amazon is evidence of a supply/demand imbalance in the job market for warehousing roles, because if people have an option to move to another company that does not treat them badly they generally will do. As it stands I'm guessing the ratio of Amazon applicants to positions is way too high meaning they can afford a high turnover rate and focus solely on increasing profit per head by squeezing their people for productivity and cutting costs spent on benefits. It's basically the same as those call centers that employ and mistreat students.

I worked in a call center and I used to always wonder why they'd accept such extreme turnover, given that there were a few weeks of training before they could put you on (the fact that there was a course in touch-typing as part of that training probably gives you an idea where the bar was for hiring). But I'd read some analysis that suggested that in some ways the employers running these systems found that desirable, because it was hard to unionize a workplace where people didn't stick around for a whole year on average.

You have to imagine that the quality of service people are providing isn't that high either if they're miserable. I think about peoples' quality of life in a call center whenever I'm stuck on hold with Verizon or some other faceless corporation.

People pretty regularly just told customers whatever they wanted to hear to get them off the phone. The more scrupulous among us wouldn't say anything false or break any rules but would deliberately upset customers to get them to ask for a supervisor (call length was a major metric which affected your pay substantially, so if you couldn't really do anything for them this was the best strategy).

"when a measure becomes a target" and all that.

> because it was hard to unionize a workplace where people didn't stick around for a whole year on average.

That's why you want inter-professional union.

How would that end up working? I think few people think of themselves as "call center professionals" because they end up in some other job, but maybe I'm misunderstanding your suggestion.

Typically every professions from every sectors (employees, medical, farmer, etc.) end up into a given category (social workers, railroad workers, etc.). Unions then use the memberships of all the employees across different companies and sectors as a leverage to negotiate better working conditions or retirement on behalf of their affiliates. So when/if is a strike is called for for a particular problem at company X or in sector Y they get the full force of every affiliates behind the union (edit: they can also dispatch strikers from company X at company Y location so workers from company Y aren't directly threatened or put into uncomfortable situations for instance, and massive street demonstration can rally many workers from many different companies/sectors).

Of course that system has been built over decades and the way it operates and negotiations are handled can vastly differ between neighboring countries (think France which is more confrontational at first and Germany where unions are more integrated into the process) (plus, unions have different political outlooks, so it's not one size fits all).

In countries with a strong social net unions use their affiliate's entrance fees to guarantee they are paid for striked days. Also some countries have laws that forbid employers to punish strikers (granted they announce in time they are going on a strike). Some sectors (medical, police, etc.) have some restrictions on that "right to strike".

That's just a really short resume, though and I don't know if such a thing could be possible in the USA.

it makes sense, because unionisation will decrease the company's competitiveness, leading to their clients shifting to another (non-unionised) call centre and everyone getting fired. Thus companies in sectors like this end up trying to squeeze every drop out of their employees before they quit, because they are expendable.

We were directly employed by the company for whom we were providing service rather than being a third-party call center.

even in that case, companies are aware of the cost-increasing effect of unionisation so the action is the same, but via direct company action rather than market attrition.

As Amazon is in the retail shipping business, essentially, their market is also seasonal and accustom to hiring and firing. It's seen as a bit more of a stain on a software company's reputation to have high turnover in software engineers; much less so in warehouse workers, where the whole infrastructure is designed to staff up for the December holiday rush and then let most of those people go.

does google employ or contract-out many lower-paid employees?

If they do, I'd imagine it would be for the things that are necessary for what they want to provide but aren't necessary for what they want to do.

They want a nice, clean work environment for their employees. So you need janitors.

Want to provide catered lunch? You need food service workers.

And the bar for "good enough" at those levels are much lower. You don't need a 5-star lunch every day. You need a decent lunch that's better than going out. And things can only get so clean.

I'm not sure but I don't see the relevance of that. I was simply pointing out that the incentives for both companies are the same, so Amazon shouldn't be bashed for this in particular.

Yes. All of their warehouse workers are employees of Integrity Staffing, not Amazon. Presumably Amazon is directing Integrity to bump up its wage.

That's a huge claim, which you shouldn't make without support. (I tried a quick search and found nothing to support "all".)

Also, the parent's question was about Google.

This is simply 100% false. What do you think the 500,000 employees of Amazon are doing if not working in a warehouse? They're not programming.

The press lumps Integrity's headcount as "Amazon". It is to Amazon's benefit that this falsehood goes unnoticed.

Go look at the last quarterly filing.


Employees (full-time and part-time; excludes contractors & temporary personnel): 575,700

As dang said, if you're going to make a big claim, at least attempt to be right.

Amazon's profit is not what I would call "a lot." As recently as 2015 they had some negative quarters. This quarter last year less than 1%. 2018 has been higher but not more than about 4%. Compare the top 20 or so corporations average profitability of about 15%, and Apple's over 20%.


Isn't that due to their currently loss-making Amazon Studios though?

It’s due to the fact that any ounce of profit they would have they instead re-invest into the business.

Which, by the way, is (part of) why they’re so dominant.

Another chart showing what Amazon has been doing:


Net income doesn’t do that naturally or by accident.

Agree, and in any other situation we'd be praising this. They're investing in the future, looking beyond the next quarter, etc.

Investing in the future is great.

Doing so while exploiting workers and dubious tax arrangements is not.

> I refuse to believe Bezos woke up this morning with a new moral sense to change the ship around.

No, of course not, but it's a victory that the pressure on them was enough they felt they had to make a concession.

True. So the people who have been saying things should be lauded, not Amazon.

Sure. Ultimately I think the question of whether Bezos is good or bad is almost beside the point.

Why is it so shitty to congratulate someone for making a good change even if that change may have been in their best interest?

Because it feels bad to concede anything at all. Which is a form of greed in its own right.

> They did some calculations and projections which showed that raising the minimum wage brings more benefits (PR stunt, not being the target of new legislation anymore, etc) than downsides (now having to pay X more to some people).

This may be true, but it doesn't nullify the fact that the workers are actually receiving a benefit from this, and it's a good thing that's worth pointing out.

There's no winning, is there?

I have friends that work there. This was not a gift, the took benefits from the workers to pay for this raise. In fact they pulled all of the bonuses from the lower level employees as well as their share of stock in the company. This is a dog and pony show, nothing more.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact