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Why Amazon Is Flooding the Country with $15 Minimum Wage Ads

12 points by elsewhen 6y ago

stevespang 6y ago
Amazon can pay $15 an hour while demanding workers meet certain quotas or be terminated - - - so they still get the production they need to justify the $15 an hour. The real reason Amazon is pushing $15 is to kill off any competition - - those who have not got as sophisticated a system as Amazon for monitoring and insuring compliance with the workers meeting the production quotas.
missedthecue 6y ago
Price controls benefit some players at the expense of others. Who could have known.
Arnt 6y ago
I'm curious. How can a new employer entering a market drag salaries down, and not just a little? The article quotes an example in New Jersey, where salaries were $24/hour on average before Amazon set up a new warehouse, $17.50 a while after. It could happen if Amazon hires a vast number of people at below-market salaries, e.g. if there were 10k people earning an average of $24 and Amazon then hired 30k at $15, then the average would be $17.20. But it seems strange that older warehouses were paying $24 on average if there were 30k employees willing to work for $15. 10k/30k are just made-up numbers for an example, of course, to illustrate the question. What don't I understand?
- imtringued 6y ago
  Well, I don't know whether those older warehouses were in competition with Amazon but let's assume they were and Amazon displaced them. By consolidating all the warehouse employment options into one company you have reduced the bargaining power of potential warehouse employees. They must work at Amazon or they won't get a job at all. There is this general pattern where companies hire contractors for non core services. The contractor is used as a point of collusion. If 100 companies are all hiring the same contractor then employees won't get to choose their employer since there is only one cleaning company in town.
- jjk166 6y ago
  Most likely it's a result of an overly broad classification system. At a small company, people are going to wear many hats. "Warehouse workers" could include people who do many related tasks like logistics, inventory tracking, team management, etc which all require some degree of skill and warrant higher pay. Amazon is large enough to mostly spin out these roles as separate jobs, and they make up a smaller fraction of their labor force. Amazon can thus hire lots of unskilled people to do a legitimately unskilled job, whereas smaller warehouse operations can not (or at least can't as frequently). Combine that with name recognition and a massive amount of recruitment infrastructure and it's hardly surprising Amazon can bring a lot of people out of the woodwork who would not have been traditionally hired at smaller warehouses. Really it is disingenuous to say that Amazon lowers warehouse salaries, which would be like saying McDonalds lowers restaurant salaries - it's changing the population to which the term applies, not changing the condition of the original population.
  - Arnt 6y ago
    This makes sense, thanks.
- wolfretcrap 6y ago
  Because people not only look at money It's reward Vs effort. Amazon's warehouse are automated and require much less manual work compared to the traditional warehouse. So yeaa some might save their back, by working for Amazon and this is what we are observing. People taking salary cut for much comfortable and pleasant work compared to what they were doing before.

12 points by elsewhen 6y ago

Amazon can pay $15 an hour while demanding workers meet certain quotas or be terminated - - - so they still get the production they need to justify the $15 an hour. The real reason Amazon is pushing $15 is to kill off any competition - - those who have not got as sophisticated a system as Amazon for monitoring and insuring compliance with the workers meeting the production quotas.

missedthecue 6y ago

Price controls benefit some players at the expense of others. Who could have known.

Arnt 6y ago

I'm curious. How can a new employer entering a market drag salaries down, and not just a little? The article quotes an example in New Jersey, where salaries were $24/hour on average before Amazon set up a new warehouse, $17.50 a while after. It could happen if Amazon hires a vast number of people at below-market salaries, e.g. if there were 10k people earning an average of $24 and Amazon then hired 30k at $15, then the average would be $17.20. But it seems strange that older warehouses were paying $24 on average if there were 30k employees willing to work for $15. 10k/30k are just made-up numbers for an example, of course, to illustrate the question. What don't I understand?

imtringued 6y ago
Well, I don't know whether those older warehouses were in competition with Amazon but let's assume they were and Amazon displaced them. By consolidating all the warehouse employment options into one company you have reduced the bargaining power of potential warehouse employees. They must work at Amazon or they won't get a job at all. There is this general pattern where companies hire contractors for non core services. The contractor is used as a point of collusion. If 100 companies are all hiring the same contractor then employees won't get to choose their employer since there is only one cleaning company in town.
jjk166 6y ago
Most likely it's a result of an overly broad classification system. At a small company, people are going to wear many hats. "Warehouse workers" could include people who do many related tasks like logistics, inventory tracking, team management, etc which all require some degree of skill and warrant higher pay. Amazon is large enough to mostly spin out these roles as separate jobs, and they make up a smaller fraction of their labor force. Amazon can thus hire lots of unskilled people to do a legitimately unskilled job, whereas smaller warehouse operations can not (or at least can't as frequently). Combine that with name recognition and a massive amount of recruitment infrastructure and it's hardly surprising Amazon can bring a lot of people out of the woodwork who would not have been traditionally hired at smaller warehouses. Really it is disingenuous to say that Amazon lowers warehouse salaries, which would be like saying McDonalds lowers restaurant salaries - it's changing the population to which the term applies, not changing the condition of the original population.
- Arnt 6y ago
  This makes sense, thanks.
wolfretcrap 6y ago
Because people not only look at money It's reward Vs effort. Amazon's warehouse are automated and require much less manual work compared to the traditional warehouse. So yeaa some might save their back, by working for Amazon and this is what we are observing. People taking salary cut for much comfortable and pleasant work compared to what they were doing before.