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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
by shimon 8y ago
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.
- skrebbel 8y agoWhy 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.
- Dylan16807 8y ago> 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.
- skrebbel 8y agoThey're comparing 12 weeks of warehouse work to revenue per hour. Why twelve weeks? It still makes no sense.
- Dylan16807 8y agoYou have to use some amount of time to get a number measured in dollars. What amount of time do you want to use?
- celticninja 8y agoThink 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.
- shimon 8y agoJust 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?
- developer2 8y ago12 weeks is (approximately) a business quarter. Corporate finances are most commonly aggregated across a quarterly schedule.
- eximius 8y agoso 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.
- shimon 8y agoI'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.
- TangoTrotFox 8y agoLooking 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.
- EpicEng 8y agoWhat's your point? That a worker, of any position or skill level, should make a salary proportional to their employer's revenue?