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It’s more like blaming the local power company for local energy prices. Nobody is blaming Amazon for wages worldwide. They’re blaming Amazon for the wages of th
by mikeash 7y ago
It’s more like blaming the local power company for local energy prices. Nobody is blaming Amazon for wages worldwide. They’re blaming Amazon for the wages of their own workers.
And why not? “The market” isn’t a magic answer here. The market provides a floor on wages, not a ceiling. If Amazon pays below market wages, they won’t get enough workers. If Amazon pays above market wages, nothing bad happens aside from reduced profits.
When you say “you can’t blame Amazon, they’re just paying market wages” what you’re saying is “profit is the only thing that could possibly matter.”
- newhaus1994 7y ago> When you say “you can’t blame Amazon, they’re just paying market wages” what you’re saying is “profit is the only thing that could possibly matter.” You put your finger on the thing that bothers me most about the free-market critique of labor conditions. They all hand-wave away the responsibility that corporations have as entities run by (presumably) empathetic humans. Amazon does not have to automate away jobs instead of giving workers fairer conditions and wages. In fact, they may find that the boost in productivity that comes from happier, more rested, more focused workers more than makes up for the marginal decrease that comes from less pressure in the workplace. The point is that we don't have to accept that corporations are, and should be, perfectly "rational" economic actors. They don't have to pursue profits at every conceivable avenue unless the market tells them otherwise.
- fuzz4lyfe 7y ago>Amazon does not have to automate away jobs instead of giving workers fairer conditions and wages. I'm Amazons competitor, I automate away the jobs and pay the lowest wages possible. Now my goods are cheaper than Amazons and you buy from me instead.
- akudha 7y agoTrue, but I bet there would be at least a small percentage of people who would still not buy from you because you don't treat your workers well. Most people would still shop with you, as their own wages are crap and they are looking for cheapest places to shop. But if they were paid well, they will at least consider shopping with ethically sound companies. It is like a circle - lower wages lead to lower purchasing power, so companies pay their workers low to lower prices to sell to low earning customers, and so on...
- cavisne 7y agoAmazon is the second most trusted institution in the USA, behind the military. It's fairly obvious how the above "draconian" conditions benefit customers. Employees that take long breaks or pick items slowly leads to delayed deliveries, having to employee more staff per delivery, having to raise prices or reduce range to cover this cost. This is really the flip side of "customer obsessed", when you are focused on customers you don't particularly care about any individual employee (all the way up the chain). For a counterexample, google and facebook mostly treat their employees well (with the exception of some contractors). However customers don't trust them as much, because they know they are profit/employee focused.
- mikeash 7y agoWhy don’t you do that now? Amazon takes in billions in profit, meaning that their prices are substantially higher than they could be. Why aren’t you (or some other competitor) taking advantage of this? It’s funny how this sort of argument never comes up in the context of taking profits.
- harryh 7y agoCompetitors do take advantage of this! There is vicious price competition for most of the kinds of goods that amazon ships from its warehouses. This competition has pushed profit margins into the single digits (probably low single digits). There's really not any room for prices to fall further with given technology. Retail is BRUTALLY competitive.
- mikeash 7y agoAnd yet some retailers make tons of profit. If it were so easy to swoop in and defeat the top dog with lower prices, how is Amazon still dominating?
- harryh 7y agoAs I said before: "This competition has pushed profit margins into the single digits" This is not tons of profit. Your assertion is incorrect.
- mikeash 7y agoIt’s more than enough to pay their warehouse workers substantially better without making any changes to their prices.
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- harryh 7y agoI do not believe that this is true. Again, profit margins for this sort of work are tiny. Adding significant wage costs would almost certainly consume a huge percentage of profits at which point the suppliers of capital will invest their money elsewhere. If you are going to make such a strong claim, you probably need to back it up with data.
- AnthonyMouse 7y agoYou're talking about a company that makes its money on volume. They have more than 600K employees and thin margins. It's not just a matter of converting profits into wages, they don't have that much in profits in proportion to the number of employees. Take their average annual profit from retail divided by number of employees and see for yourself what the difference in hourly wage would be. To pay significantly more they would have to raise prices, which they can't do because they're in competition with Walmart and everyone else.
- mikeash 7y agoAmazon has a profit of over $11 billion last year. They can definitely afford to pay their warehouse workers better.
- fuzz4lyfe 7y agoWhen you eat out you can probably afford to tip better, why don't you? Do you hate restaurant workers?
- mikeash 7y agoI try to tip well. If you think I should tip better, make your case. If I disagree, I’ll make my case. I can guarantee you that if that happens, my argument won’t be that I’m tipping the market rate.
- fuzz4lyfe 7y agoWaitresses make less than minimum wage, don't they deserve healthcare, to raise a family, to live in the center of some of the most expensive real estate in the world and have at least two weeks paid vacation per year? If you were to tip say $50 to $100 each time you ate out this could be a reality. How much would $50 be compared to your net worth, less than 1%? Greedy capitalist.
- mikeash 7y ago
- harryh 7y agoIf we want unskilled laborers to have more money, it's much more economically efficient for governments do this through taxation and transfer payments then for individual companies that happen to employ people in this category to pay above market wages. If society does it through taxation, it's everyone's responsibility. If only certain companies are responsible, then only a portion of the population is responsible.
- mikeash 7y agoI completely agree. If Amazon pays their workers better, that won’t fix the millions of other workers stuck with bad pay and abusive jobs. But that doesn’t mean we should ignore the individual companies. Certainly, our energies should be focused on bigger societal changes. But it’s not misplaced ore to also mention the fact that some companies could already do better, and choose not to.
- harryh 7y agoI completely agree. If Amazon pays their workers better, that won’t fix the millions of other workers stuck with bad pay and abusive jobs. That's not what I meant by "more efficient." If every company employing low skilled labor suddenly raised pay above market wages it might help all those workers. But it would mean that prices for things produced by unskilled laborers were artificially high and prices produced by higher skilled laborers would be artificially low. This would cause the market to produce the wrong mix of goods and services and we would all be worse off for the difference.
- mikeash 7y agoI don’t understand, how is that different from taxing and giving workers money that way? They should have the same effect in terms of economic efficiency. The only reason we use taxes for this sort of thing is because it’s harder to cheat.
- harryh 7y agoIf you do it by pushing wages around artificially then you artificially change the prices of certain goods relative to others. If you do it via taxes and transfer payments then you don't distort the prices of goods.
- jcims 7y agoPaying someone materially above market value creates a precarious situation for the employee in which they are operating with an income they can’t hope to replace if the employer leaves. It happened where I live with an auto assembly plant. There are deleterious effects on the local job market as well, in which lical companies can’t pay enough to compete. All told it’s probably better to put the money in the hands of an employee, but there are certainly negative consequences that can arise.
- rayiner 7y agoThat analysis is wrong because it ignores two facts (1) Retail is a highly competitive, low margin business; and (2) Economic systems are dynamic, not static. Amazon’s profit margins are in low single digit percent. If Amazon pays above market wages and keeps prices the same, that creates an opportunity for Wal-Mart to come in and lower prices by using lower cost labor. Customers will go to Wal-Mart instead, because the Internet and things like Google Shopping make it trivial for consumers to chase marginal savings. As a result, Amazon’s workers are out of a job. Note, by the way, that the minimum wage in our competitor countries (France, Germany, UK) is about $11.50 per hour adjusted for cost of living. That’s much lower than what Amazon is laying.