6 ms·

Jeff Bezos's gain during Covid is enough to give all his employees a $105k bonus

35 points by davidbarker 6y ago

zalkota 6y ago
You’re paid based on the value you offer to others. Jeff bezos went out and added value to every American by standardizing 2 day shipping and server hosting. On the flip side, his truck driver only added value to those in his immediate surrounding.
brodouevencode 6y ago
The fact that the author could make such a simplified blanket statement shows that the author has never run a business nor does he understand how corporations work.
- umeshunni 6y ago
  You should generally assume that journalists don't understand math or economics. If they did, for one, they wouldn't be journalists.
  - exclusiv 6y ago
    Seriously. And you're lucky if you get an actual journalist too.
maerF0x0 6y ago
And if he did there'd be massive inflation in all the things his employees tend to buy. This is analogous to when bruce almighty grants every wins the lottery... https://getyarn.io/yarn-clip/71323533-cf3e-4176-b9f1-b22cfa05e2e0 https://getyarn.io/yarn-clip/71323533-cf3e-4176-b9f1-b22cfa0...
- TheMblabla 6y ago
  Well that's probably not true, if they tend to buy it, wouldn't they already have it? I mean, when you see people win the lotto what's most common is they start buying luxury goods they couldn't afford before. That and paying off student loans/debt
  - rumanator 6y ago
    You're focusing your argument on a specific person while ignoring the point about how a global increase in liquidity triggers global inflation.
    - TheMblabla 6y ago
      Maybe, im no economist but wouldnt the psychological effects of cash windfalls be more applicable? I doubt these amounts would have much effect in the scheme of the global markets
- aaron-santos 6y ago
  This is actually a really good argument for not tying wages to company success. The baseline wage for Amazon employees should simply be the cost that it takes to house and feed them which is entirely different from the value they produce.
  - valuearb 6y ago
    So you are saying they are way overpaid?
    - aaron-santos 6y ago
      What incentive does Jeff have to pay Amazon employees any more than that?
  - brodouevencode 6y ago
    No the baseline wage is what the market will bear. Employment is subjected to market forces just like the goods and services those employees produce. The common example is underwater welders: high demand, low supply (high danger factor) results in $300k/yr salary. Welders at the local muffler shop in my area pay around $20/hr, highly skilled welders get between $75-$100/hr depending on if their independent or work for a large shop, and experience.
- jjk166 6y ago
  875,000 people spread all around the world isn't a lot. The grocery stores in a city of 100,000 people aren't going to raise their prices because the 50 people who work in the local amazon fulfillment center have moved into the upper middle class. Maybe you'd see a slight rise in property values near major Amazon facilities, but in few other cases do amazon employees make up a significant portion of total demand.
  - captainredbeard 6y ago
    A one-off sub-$200k payment isn't going to move a fulfillment center worker to upper middle class.
zaptheimpaler 6y ago
There was some dumb tweet about how he could give everyone in the US $50K which was shown to be wrong after basic division (not to mention the inflation it would cause). Now we are at dumb tweet #2. This is gains from his stock holdings. Selling all of it would mean he no longer owns any stake in Amazon. And its paper gains on a stock - it could double again in a year at which point the same people would whine that he sold too early so employees only got $100K instead of $200K. And its price would drop as he sold it, creating an opportunity to whine about how all the regular stockholders of Amazon (who far outnumber employees) suffered at the expense of Amazon employees. Isn't that unfair too? Maybe then we should go even broader and give it to all of the US? At which point you loop back to dumb tweet #1 and realize that would net to $500 or something per person and be completely eaten by distribution costs, inflation and landlords. Then write an outrage piece on the landlords. With enough envy & misunderstanding, you too can complain about how unfair everything is!
- airbreather 6y ago
  The current price is not usually what you would get if you sold down to zero, if you could.
- drewrv 6y ago
  There's some misunderstandings in this comment. Liquidating only his gains would not mean he no longer owns any stake in Amazon. And while you're right that selling some of the gains might cause the share price to dip, there's no need to sell shares. He could transfer the shares rather than cash. But honestly the fine details of this hypothetical cash transfer don't matter. It's a thought experiment to demonstrate the absurd situation here: a handful of people in this country are amassing more wealth than entire nations while millions of people are struggling to keep a roof over their head. Structuring our society that way is a choice, and I don't understand why anyone thinks it's a sensible choice.
  - throwaway4007 6y ago
    >I don't understand why anyone thinks it's a sensible choice. Hint: it's because they usually work for the people they are defending. Remember which site you are on
ryan_h 6y ago
Statements by journalists like this and actions like Bernie Sander's Make Billionaires Pay Act shows that either 1) a number of people have no understanding of how asset prices work or 2) they understand the underlying economics, and would rather stir up anger to implement their agenda than be honest. An example I've been giving to people who are making the argument about billionaires making money during the pandemic is: Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill and condemns it so that it is now worthless. A week later, the city finds that they've made an error, and there is no toxic waste, so now your house goes back to being worth $300,000. A month after that, you get a tax bill in your mailbox for $100,000, 30% of your $300,000 asset gain.
- consz 6y ago
  You're accusing others of not understanding how asset prices work, then come up with a scenario that's inaccurate? Or do you claim to understand how asset prices work but not capital gains? Please help me steelman your argument, assuming you aren't being disingenuous.
  - ryan_h 6y ago
    Holding an asset does not result in a capital gain. The Tax the Billionaires bill wants to tax holding an asset that has appreciated in value. Not only that, but they use a handpicked time boundary that from the bottom of the market crash to calculate a windfall tax. Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until today. The value of 1 BTC has fluctuated the entire time, but you've only ever owned 1BTC. Here are a couple lows/highs during the period: Dec 2018 - $3500 Jun 2019 - $12000 $8500 gain (on paper) March 2020 - $5500 Aug 2020 - $12000 $6500 gain (on paper) To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from the 2018 crash and recovery. If these types of windfall taxes become a common thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So you'd have paid $9,000 to hold your 1BTC. If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the entire $10,000 is a capital gain. Lets say your long term capital gains rate is 15%, you'd owe $1,500 in taxes when you sell it. So for investing in 1 BTC, you'd have $8500 in your bank account, and would have paid $10,500 to hold it. 1) Is BTC more volatile than Amazon stock: Yes 2) Does that amplify the numbers in my example: Yes 3) Is wealth inequality a giant problem in the country: Yes 4) Will I shed tears if Jeff Bezos gets a giant tax bill in the mail: No However, I think it does demonstrate the problem with taxing the change in value of an asset, vs your capital gain from when you sell it.
umeshunni 6y ago
Given that nearly all Amazon employees get stock, it's quite likely that the average employee gained more than $100K in the last 7 months.
- bradknowles 6y ago
  At high stock values, you don’t get many shares. It’s more like one share this year, and one share next year. And a single share isn’t going to gain $100k.
GaryNumanVevo 6y ago
Of course Jeff isn't in the position to sell his entire Amazon shares, so the $150K is more symbolic than anything. However, a 3%-6% wealth tax (or even a basic VAT) would help redistribute wealth and fund healthcare, infrastructure upgrades, energy security. 3% is fairly modest, but definitely do-able when you're Jeff Bezos.
- valuearb 6y ago
  We normally try to tax income or consumption for a reason, because taxing capital is incredibly damaging. And we could seize all of Bezos net worth, and it would only cover a few weeks of federal spending. Of course we could push it closer to 2 months including Bill Gates, Elon Musk, and Warren Buffett, but what do we do when we run out of billionaires in a couple years?
  - captainredbeard 6y ago
    It's also very difficult to cheat w.r.t. wealth taxes vs. income taxes, which for any appreciable amount of money are trivial to trace.
valuearb 6y ago
Who would buy $90B of Amazon shares at market price? The Chinese CCP? I’d actually like see how they would run Amazon. I’m guessing we might complain even more about their data collection processes.
juniper_strong 6y ago
If each Amazon employee created a company worth as much as Amazon, it would be enough to give every American a $4,250,000,000 bonus.

35 points by davidbarker 6y ago

You’re paid based on the value you offer to others. Jeff bezos went out and added value to every American by standardizing 2 day shipping and server hosting. On the flip side, his truck driver only added value to those in his immediate surrounding.

brodouevencode 6y ago

The fact that the author could make such a simplified blanket statement shows that the author has never run a business nor does he understand how corporations work.

umeshunni 6y ago
You should generally assume that journalists don't understand math or economics. If they did, for one, they wouldn't be journalists.
- exclusiv 6y ago
  Seriously. And you're lucky if you get an actual journalist too.

maerF0x0 6y ago

And if he did there'd be massive inflation in all the things his employees tend to buy. This is analogous to when bruce almighty grants every wins the lottery... https://getyarn.io/yarn-clip/71323533-cf3e-4176-b9f1-b22cfa05e2e0 https://getyarn.io/yarn-clip/71323533-cf3e-4176-b9f1-b22cfa0...

TheMblabla 6y ago
Well that's probably not true, if they tend to buy it, wouldn't they already have it? I mean, when you see people win the lotto what's most common is they start buying luxury goods they couldn't afford before. That and paying off student loans/debt
- rumanator 6y ago
  You're focusing your argument on a specific person while ignoring the point about how a global increase in liquidity triggers global inflation.
  - TheMblabla 6y ago
    Maybe, im no economist but wouldnt the psychological effects of cash windfalls be more applicable? I doubt these amounts would have much effect in the scheme of the global markets
aaron-santos 6y ago
This is actually a really good argument for not tying wages to company success. The baseline wage for Amazon employees should simply be the cost that it takes to house and feed them which is entirely different from the value they produce.
- valuearb 6y ago
  So you are saying they are way overpaid?
  - aaron-santos 6y ago
    What incentive does Jeff have to pay Amazon employees any more than that?
- brodouevencode 6y ago
  No the baseline wage is what the market will bear. Employment is subjected to market forces just like the goods and services those employees produce. The common example is underwater welders: high demand, low supply (high danger factor) results in $300k/yr salary. Welders at the local muffler shop in my area pay around $20/hr, highly skilled welders get between $75-$100/hr depending on if their independent or work for a large shop, and experience.
jjk166 6y ago
875,000 people spread all around the world isn't a lot. The grocery stores in a city of 100,000 people aren't going to raise their prices because the 50 people who work in the local amazon fulfillment center have moved into the upper middle class. Maybe you'd see a slight rise in property values near major Amazon facilities, but in few other cases do amazon employees make up a significant portion of total demand.
- captainredbeard 6y ago
  A one-off sub-$200k payment isn't going to move a fulfillment center worker to upper middle class.

zaptheimpaler 6y ago

There was some dumb tweet about how he could give everyone in the US $50K which was shown to be wrong after basic division (not to mention the inflation it would cause). Now we are at dumb tweet #2. This is gains from his stock holdings. Selling all of it would mean he no longer owns any stake in Amazon. And its paper gains on a stock - it could double again in a year at which point the same people would whine that he sold too early so employees only got $100K instead of $200K. And its price would drop as he sold it, creating an opportunity to whine about how all the regular stockholders of Amazon (who far outnumber employees) suffered at the expense of Amazon employees. Isn't that unfair too? Maybe then we should go even broader and give it to all of the US? At which point you loop back to dumb tweet #1 and realize that would net to $500 or something per person and be completely eaten by distribution costs, inflation and landlords. Then write an outrage piece on the landlords. With enough envy & misunderstanding, you too can complain about how unfair everything is!

airbreather 6y ago
The current price is not usually what you would get if you sold down to zero, if you could.
drewrv 6y ago
There's some misunderstandings in this comment. Liquidating only his gains would not mean he no longer owns any stake in Amazon. And while you're right that selling some of the gains might cause the share price to dip, there's no need to sell shares. He could transfer the shares rather than cash. But honestly the fine details of this hypothetical cash transfer don't matter. It's a thought experiment to demonstrate the absurd situation here: a handful of people in this country are amassing more wealth than entire nations while millions of people are struggling to keep a roof over their head. Structuring our society that way is a choice, and I don't understand why anyone thinks it's a sensible choice.
- throwaway4007 6y ago
  >I don't understand why anyone thinks it's a sensible choice. Hint: it's because they usually work for the people they are defending. Remember which site you are on

ryan_h 6y ago

Statements by journalists like this and actions like Bernie Sander's Make Billionaires Pay Act shows that either 1) a number of people have no understanding of how asset prices work or 2) they understand the underlying economics, and would rather stir up anger to implement their agenda than be honest. An example I've been giving to people who are making the argument about billionaires making money during the pandemic is: Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill and condemns it so that it is now worthless. A week later, the city finds that they've made an error, and there is no toxic waste, so now your house goes back to being worth $300,000. A month after that, you get a tax bill in your mailbox for $100,000, 30% of your $300,000 asset gain.

consz 6y ago
You're accusing others of not understanding how asset prices work, then come up with a scenario that's inaccurate? Or do you claim to understand how asset prices work but not capital gains? Please help me steelman your argument, assuming you aren't being disingenuous.
- ryan_h 6y ago
  Holding an asset does not result in a capital gain. The Tax the Billionaires bill wants to tax holding an asset that has appreciated in value. Not only that, but they use a handpicked time boundary that from the bottom of the market crash to calculate a windfall tax. Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until today. The value of 1 BTC has fluctuated the entire time, but you've only ever owned 1BTC. Here are a couple lows/highs during the period: Dec 2018 - $3500 Jun 2019 - $12000 $8500 gain (on paper) March 2020 - $5500 Aug 2020 - $12000 $6500 gain (on paper) To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from the 2018 crash and recovery. If these types of windfall taxes become a common thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So you'd have paid $9,000 to hold your 1BTC. If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the entire $10,000 is a capital gain. Lets say your long term capital gains rate is 15%, you'd owe $1,500 in taxes when you sell it. So for investing in 1 BTC, you'd have $8500 in your bank account, and would have paid $10,500 to hold it. 1) Is BTC more volatile than Amazon stock: Yes 2) Does that amplify the numbers in my example: Yes 3) Is wealth inequality a giant problem in the country: Yes 4) Will I shed tears if Jeff Bezos gets a giant tax bill in the mail: No However, I think it does demonstrate the problem with taxing the change in value of an asset, vs your capital gain from when you sell it.

umeshunni 6y ago

Given that nearly all Amazon employees get stock, it's quite likely that the average employee gained more than $100K in the last 7 months.

bradknowles 6y ago
At high stock values, you don’t get many shares. It’s more like one share this year, and one share next year. And a single share isn’t going to gain $100k.

GaryNumanVevo 6y ago

Of course Jeff isn't in the position to sell his entire Amazon shares, so the $150K is more symbolic than anything. However, a 3%-6% wealth tax (or even a basic VAT) would help redistribute wealth and fund healthcare, infrastructure upgrades, energy security. 3% is fairly modest, but definitely do-able when you're Jeff Bezos.

valuearb 6y ago
We normally try to tax income or consumption for a reason, because taxing capital is incredibly damaging. And we could seize all of Bezos net worth, and it would only cover a few weeks of federal spending. Of course we could push it closer to 2 months including Bill Gates, Elon Musk, and Warren Buffett, but what do we do when we run out of billionaires in a couple years?
- captainredbeard 6y ago
  It's also very difficult to cheat w.r.t. wealth taxes vs. income taxes, which for any appreciable amount of money are trivial to trace.

valuearb 6y ago

Who would buy $90B of Amazon shares at market price? The Chinese CCP? I’d actually like see how they would run Amazon. I’m guessing we might complain even more about their data collection processes.

juniper_strong 6y ago

If each Amazon employee created a company worth as much as Amazon, it would be enough to give every American a $4,250,000,000 bonus.