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> The question is, at what cost? The US taxpayer also picks up the welfare tab for Walmart and Amazon employees, as well as the costs associated with un- or und
by baddox 8y ago
> The question is, at what cost? The US taxpayer also picks up the welfare tab for Walmart and Amazon employees, as well as the costs associated with un- or under-insured people getting sick from physically demanding work. The American taxpayer directly subsidizes these companies [1][2].
But would the American taxpayer subsidize the entire retail market any less if it were the same size but split up among several smaller and less efficient (meaning consumer prices were higher)? I could see that being possible, but I see no reason to assume it would be likely.
Yes, one way that Amazon and Walmart reduce their costs (and thus their prices) is by paying certain employees as little as possible, but it seems to me that smaller firms can and probably often do the exact same thing, but are still less efficient than Amazon and Walmart due to economies of scale that are unrelated to labor costs.
- cepth 8y agoI think there's a pretty simple microeconomics framework through which someone could make an argument about how one huge player depresses wages. Just think of Amazon as a monopsony, a single buyer of a good, for labor. The Roosevelt Institute, which is left-leaning, did a project on this recently: http://rooseveltinstitute.org/how-widespread-labor-monopsony-some-new-results-suggest-its-pervasive/ http://rooseveltinstitute.org/how-widespread-labor-monopsony.... Noah Smith summarized the findings of another recent economics research paper, which found that there's a significant difference in wages offered in areas with multiple employers hiring for a similar position (https://www.bloomberg.com/view/articles/2017-12-29/monopolies-may-be-worse-for-workers-than-for-consumers https://www.bloomberg.com/view/articles/2017-12-29/monopolie...).