17 ms·

Amazon’s wage increase to $15 an hour also upped pay for non-Amazon workers

181 points by rustoo 5y ago

klaudius 5y ago
Now that they have market power and monopoly position in certain areas they lobby for regulation to make it difficult for startups to disrupt them. They used no sales tax and lower wages when they were starting up, but now want to prevent the same advantages for startups.
- mcny 5y ago
  > Now that they have market power and monopoly position in certain areas they lobby for regulation to make it difficult for startups to disrupt them. They used no sales tax and lower wages when they were starting up, but now want to prevent the same advantages for startups. That is an interesting argument and I'd like to hear from members of the community about how they feel about this. (Sorry if the questions feel like they are begging the answer, I promise you I am trying to not bring my biases into this) Should everyone play by the same rules? For example, how should countries handle pollution? Do emerging economies (China PR in particular but it applies to all nations) have a different, lesser obligation when it comes to pumping carbon into the atmosphere? Did we (USA) and western Europe get a head start with our economy and therefore should be subject to lower limits on how much we carbon we pump into the atmosphere going forward? Or does this question sound absurd to you?
  - lotsofpulp 5y ago
    > That is an interesting argument It is a terrible argument. Amazon does not control wages, supply and demand curves do. Amazon having lower wages before is simply due to the market for labor at that time having more supply relative to demand (or less demand relative to supply). They did not have any special laws or circumstances which did not apply to everyone else, regarding the wages they pay. And they still do not.
  - pjc50 5y ago
    > Or does this question sound absurd to you? It sounds like an extremely leading question, or at least a dozen separate questions. But the further you go back in history the more, larger, and nastier questions you find where one country gained an advantage at the expense of another, often including a huge number of human lives. Was it really right for France to insist on reparations from Haiti, for example?
    - xwolfi 5y ago
      It certainly wasn't right from a Haitian point of view, but sometimes, better put up with it and have a powerful ally during your start as an independent country, whatever the debt cost, than be fighting them forever at tremendous cost for every sides. Debt between countries don't matter much, and I certainly hope one day we'll have the budget to repay Haiti, but I'm happy we solved it with this infamy rather than murdered each other for decades. It's not the most optimal way we could have behaved, but we've been more abject with former colonies.
  - xwolfi 5y ago
    The example of China is also a difficult one. If you look at countries, sure they pollute a lot more than Switzerland, but if you look at per capita (or say you imagine China not as a country but as dozens of Switzerlands), then they look quite better.
  - imtringued 5y ago
    >For example, how should countries handle pollution? Just set a cap based on cumulative emissions. 99% of the time such a cap is aspirational though... It may not be achievable or politicians have other priorities.
    - JumpCrisscross 5y ago
      > set a cap based on cumulative emissions My family immigrated to America. Given we’re counting the sins of our forefathers, should the cap that applies to me be my origin country’s? Or America’s? How do we apportion the USSR’s carbon emissions? Or the British Empire’s?
- geewee 5y ago
  Wait, so is your argument that it should be okay to pay people dirt-poor wages because Amazon used to get away with it? I get that it's a classic tactic to avoid a loophole in legislation and then build a regulatory moat afterwards, but I don't really feel paying people more is a good example.
- panick21 5y ago
  And if they had not raised wages people would accuse them that they are using market power to push wages down.
- jakelazaroff 5y ago
  Why should we care about the plight of a startup that wants to use low wages as a competitive advantage?
- flavius29663 5y ago
  that is usually the case for most regulations. While it's wild west, big corporations are formed. Now the corporations want regulations. It's an old tale, and unfortunately the people think the government introduces regulations for their benefit. Regulations stifle competition and in the end the public suffers on the long term.
Multicomp 5y ago
Anecdote: Because of a months-long labor shortage and being unable to staff operations even after multiple temp agencies were engaged, an employer somewhere in the universe raised wages to a floor of 15 per hour this past month. It used to start at minimum wage, then went to 8 in 2014, now here. Everyone who was getting +1,2,3 dollars over that got bumped porportionally, so if you were at 15, you now got 17, if you were at 22 (only things like paramedics) you were at 25 etc. Why? Amazon has a warehouse nearby. We've bled staff to them for years.
- andagainagain 5y ago
  A local union factory relatively recently started hiring like crazy a few years back. Their wages were higher than every other job in the area, and the same thing happened. Within a year a job that WAS offering $10.50 and saying that they were generous started offering #$12... then $13.50... then $14. Now they're also offering a few hundred dollar bonus as well.
  - nitrogen 5y ago
    Has there been any effect on downstream prices of the goods and services offered by those companies, or has it all been pure gain for the workers?
  - CapitalistCartr 5y ago
    Making it obvious they could have afforded that before.
    - minitoar 5y ago
      I don’t understand this argument. I could afford to pay more for most services but I don’t unless I have to.
      - Sebguer 5y ago
        Are you a company? You are an individual and paying for things comes from the money that you earned with your own labor. A company's money comes purely from extracting value from its workers. It then tries to return as little value as possible to the people who created that value, in order to reward its owners.
elliekelly 5y ago
I think the actual economics paper[1] is far more interesting than Amazon’s PR spin on it. What Amazon (I suspect) knows but the paper authors sidestep a bit is the elasticity of the unskilled low-wage labor market. If you’re a waiter or a cashier and your boss or the job requirements become unbearable it’s not terribly difficult to waltz into Home Depot or the local grocery store and get a new job making the same amount of money. Amazon paints their $15 as a benevolent community service but given all that we know about the expectations and requirements of an Amazon warehouse worker it seems to me that Amazon’s wage increase was necessary in order to compete in the labor market. If you could work in an Amazon warehouse for $X/hour or work stocking shelves at Target for $X/hour very few people are going to choose Amazon. And this is evidenced in the referenced/linked economics paper. Amazon’s 2018 wage increase from $11/hour to $15/hour resulted in an average local unskilled low-wage increase of 4.7% suggesting those local markets didn’t need to meet Amazon’s wages in order to compete with them. The $15 is enough to lure some people to work at Amazon but it seems there are others for which slightly lower pay and the benefit of bathroom breaks is a trade-off they’re willing to make in the labor market. [1]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3793677 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3793677
- kube-system 5y ago
  Of course. How else do you entice literally hundreds of thousands of people to apply for a job? They’ve hired somewhere around a million employees in the past 5 years. > The $15 is enough to lure some people to work at Amazon but it seems there are others for which slightly lower pay and the benefit of bathroom breaks I know a couple of people who work at an Amazon warehouse, and I’ve asked them about this, and they said it’s never been an issue.
  - deleted 5y ago
    [deleted]
  - toast0 5y ago
    I think bathroom breaks in warehouses was an issue several years ago. When that got enough media attention, it seems to have stopped (at least mostly); but now that bathroom breaks for drivers is an issue, a lot of people are assuming it's the same thing, so it must have been going on the whole time. But while it's the same type of problem, it's not quite the same problem as before.
repsilat 5y ago
Is this "Baumol's Cost Disease"? Productivity goes up at Amazon, wages go up at Amazon, wages go up elsewhere so they can attract workers, and prices for consumers go up. Good marketing, but a bad outcome once you've read Bastiat -- jobs and wages are a cost.
- lotsofpulp 5y ago
  > Productivity goes up at Amazon, wages go up at Amazon, Productivity going up does not cause wages to go up. Lower supply of labor relative to demand or higher demand relative to supply causes wages to go up.
  - repsilat 5y ago
    I don't think Amazon's decision to raise wages was pure microeconomic pressure. Single market participants don't need to get their policies out of a textbook, and textbook responses don't get as much news coverage. High productivity leads to better margins. Better margins allow Amazon to raise wages. Raising wages helped them hire in a competitive marketplace, sure, but it was also a political act. Amazon has been accused of mistreating workers, and paying them above the going rate defuses that accusation.
    - lotsofpulp 5y ago
      There may be a political aspect to it, but supply for warehouse type labor has been shrinking and demand was increasing for a decade, so they probably saw the writing on the wall and decided to kill 2 birds with one stone. But I do not think Amazon can afford to stay competitive with Target and Walmart and Home Depot and spend a material amount more on labor costs too. At least not without subsidizing the retail operations with margins from other areas of the business.
      - bombcar 5y ago
        I think it goes the other way - Target and Home Depot are beginning to leverage the fact that hey have warehouses across the country (their stores) - AND they provide quality control that Amazon seems unwilling to do. Which will be what sinks Amazon- becoming an fancy US storefront for Alibaba.
bryanrasmussen 5y ago
reminds me of Henry Ford's wage hike https://www.saturdayeveningpost.com/2014/01/ford-doubles-minimum-wage/ https://www.saturdayeveningpost.com/2014/01/ford-doubles-min...
- elliekelly 5y ago
  > According to an article (above) in the Post sponsored by the automaker Interesting! I had no idea submarining was happening a hundred years ago. I wonder how common it was. This was my favorite line though: > Ford employees would be “demoralized by this sudden affluence,” and, of course, Ford Motor Company would soon be bankrupt. Nothing hurts employee morale like a huge raise!
  - bombcar 5y ago
    If anything it was more common - the term “yellow journalism” comes from that era. Most of what we are looking back is the stuff with value that survived.
  - a1369209993 5y ago
    > > "demoralized by this sudden affluence," > Nothing hurts employee morale like a huge raise! That seems likely to be language drift, and indeed checking a contemporary-ish dictionary produces: demoralize 2 c : to throw into disorder morale 2 b : a sense of common purpose with respect to a group : espirit de corps which sounds like a much less stupid concern.
pkilgore 5y ago
Why are we linking to the press release instead of the paper?
- deleted 5y ago
  [deleted]
kaliali 5y ago
While it is true that Amazon raised their wages to at least $15/hr, they also cut healthcare, benefits, and other things their employees were receiving. Why Amazon is Begging For Regulations: The Twisted Economics of Amazon https://www.youtube.com/watch?v=KPGZgujnVek https://www.youtube.com/watch?v=KPGZgujnVek
miguelazo 5y ago
Of course, no mention that Bernie Sanders had to drag Amazon kicking and screaming to raise their minimum wage to $15. Glad they finally see the benefits...
- missedthecue 5y ago
  Kicking and screaming? Do you have any evidence of this? Amazon led the pack. Target, Chipotle, and others have followed.
  - miguelazo 5y ago
    If you don’t keep up with an issue, maybe try Googling before making a comment like that. Amazon’s position could most generously be described as “defensive” during the months-long feud with Sanders that led to the increase. https://www.businessinsider.com/bernie-sanders-amazon-worker-pay-safety-conditions-2018-8 https://www.businessinsider.com/bernie-sanders-amazon-worker...
nautilus12 5y ago
Amazons warehouse wage no longer holding back the market for non Amazon workers. FTFY
StandardFuture 5y ago
A negative article about Walmart and a positive article about Amazon on the HN front page at the same time? There is NO WAY this could ever be PR firm coordinated ... NO WAY. I would NEVER break HN rules and EVER imply such a thing. I follow the rules.
anti-nazi 5y ago
time for a living wage across the board. if you can't afford to pay your employees a living wage you do not deserve employees
synaesthesisx 5y ago
$15/hour is not a living wage in the US. That is absolutely ridiculous. Amazon should double it for their warehouse workers (they certainly can afford to!).
- hnarn 5y ago
  Surely that depends on where in the US you live. It's about $2,400 a month which is by no means categorically impossible to live on in any part of the US.
TedShiller 5y ago
It’s called inflation
slim 5y ago
This is maybe in reaction to the "make amazon pay" global day of action from last week https://mobile.twitter.com/hashtag/MakeAmazonPay https://mobile.twitter.com/hashtag/MakeAmazonPay
varispeed 5y ago
This isn't right. If workers have to apply for any benefits, because they cannot live off what they get paid, it means other tax payers subsidise their wages, but Amazon keeps the profits (then fakes losses and avoid tax). They are essentially stealing from everyone.
joshu 5y ago
https://en.m.wikipedia.org/wiki/Baumol's_cost_disease https://en.m.wikipedia.org/wiki/Baumol's_cost_disease

181 points by rustoo 5y ago

Now that they have market power and monopoly position in certain areas they lobby for regulation to make it difficult for startups to disrupt them. They used no sales tax and lower wages when they were starting up, but now want to prevent the same advantages for startups.

mcny 5y ago
> Now that they have market power and monopoly position in certain areas they lobby for regulation to make it difficult for startups to disrupt them. They used no sales tax and lower wages when they were starting up, but now want to prevent the same advantages for startups. That is an interesting argument and I'd like to hear from members of the community about how they feel about this. (Sorry if the questions feel like they are begging the answer, I promise you I am trying to not bring my biases into this) Should everyone play by the same rules? For example, how should countries handle pollution? Do emerging economies (China PR in particular but it applies to all nations) have a different, lesser obligation when it comes to pumping carbon into the atmosphere? Did we (USA) and western Europe get a head start with our economy and therefore should be subject to lower limits on how much we carbon we pump into the atmosphere going forward? Or does this question sound absurd to you?
- lotsofpulp 5y ago
  > That is an interesting argument It is a terrible argument. Amazon does not control wages, supply and demand curves do. Amazon having lower wages before is simply due to the market for labor at that time having more supply relative to demand (or less demand relative to supply). They did not have any special laws or circumstances which did not apply to everyone else, regarding the wages they pay. And they still do not.
- pjc50 5y ago
  > Or does this question sound absurd to you? It sounds like an extremely leading question, or at least a dozen separate questions. But the further you go back in history the more, larger, and nastier questions you find where one country gained an advantage at the expense of another, often including a huge number of human lives. Was it really right for France to insist on reparations from Haiti, for example?
  - xwolfi 5y ago
    It certainly wasn't right from a Haitian point of view, but sometimes, better put up with it and have a powerful ally during your start as an independent country, whatever the debt cost, than be fighting them forever at tremendous cost for every sides. Debt between countries don't matter much, and I certainly hope one day we'll have the budget to repay Haiti, but I'm happy we solved it with this infamy rather than murdered each other for decades. It's not the most optimal way we could have behaved, but we've been more abject with former colonies.
- xwolfi 5y ago
  The example of China is also a difficult one. If you look at countries, sure they pollute a lot more than Switzerland, but if you look at per capita (or say you imagine China not as a country but as dozens of Switzerlands), then they look quite better.
- imtringued 5y ago
  >For example, how should countries handle pollution? Just set a cap based on cumulative emissions. 99% of the time such a cap is aspirational though... It may not be achievable or politicians have other priorities.
  - JumpCrisscross 5y ago
    > set a cap based on cumulative emissions My family immigrated to America. Given we’re counting the sins of our forefathers, should the cap that applies to me be my origin country’s? Or America’s? How do we apportion the USSR’s carbon emissions? Or the British Empire’s?
geewee 5y ago
Wait, so is your argument that it should be okay to pay people dirt-poor wages because Amazon used to get away with it? I get that it's a classic tactic to avoid a loophole in legislation and then build a regulatory moat afterwards, but I don't really feel paying people more is a good example.
panick21 5y ago
And if they had not raised wages people would accuse them that they are using market power to push wages down.
jakelazaroff 5y ago
Why should we care about the plight of a startup that wants to use low wages as a competitive advantage?
flavius29663 5y ago
that is usually the case for most regulations. While it's wild west, big corporations are formed. Now the corporations want regulations. It's an old tale, and unfortunately the people think the government introduces regulations for their benefit. Regulations stifle competition and in the end the public suffers on the long term.

Multicomp 5y ago

Anecdote: Because of a months-long labor shortage and being unable to staff operations even after multiple temp agencies were engaged, an employer somewhere in the universe raised wages to a floor of 15 per hour this past month. It used to start at minimum wage, then went to 8 in 2014, now here. Everyone who was getting +1,2,3 dollars over that got bumped porportionally, so if you were at 15, you now got 17, if you were at 22 (only things like paramedics) you were at 25 etc. Why? Amazon has a warehouse nearby. We've bled staff to them for years.

andagainagain 5y ago
A local union factory relatively recently started hiring like crazy a few years back. Their wages were higher than every other job in the area, and the same thing happened. Within a year a job that WAS offering $10.50 and saying that they were generous started offering #$12... then $13.50... then $14. Now they're also offering a few hundred dollar bonus as well.
- nitrogen 5y ago
  Has there been any effect on downstream prices of the goods and services offered by those companies, or has it all been pure gain for the workers?
- CapitalistCartr 5y ago
  Making it obvious they could have afforded that before.
  - minitoar 5y ago
    I don’t understand this argument. I could afford to pay more for most services but I don’t unless I have to.
    - Sebguer 5y ago
      Are you a company? You are an individual and paying for things comes from the money that you earned with your own labor. A company's money comes purely from extracting value from its workers. It then tries to return as little value as possible to the people who created that value, in order to reward its owners.

elliekelly 5y ago

I think the actual economics paper[1] is far more interesting than Amazon’s PR spin on it. What Amazon (I suspect) knows but the paper authors sidestep a bit is the elasticity of the unskilled low-wage labor market. If you’re a waiter or a cashier and your boss or the job requirements become unbearable it’s not terribly difficult to waltz into Home Depot or the local grocery store and get a new job making the same amount of money. Amazon paints their $15 as a benevolent community service but given all that we know about the expectations and requirements of an Amazon warehouse worker it seems to me that Amazon’s wage increase was necessary in order to compete in the labor market. If you could work in an Amazon warehouse for $X/hour or work stocking shelves at Target for $X/hour very few people are going to choose Amazon. And this is evidenced in the referenced/linked economics paper. Amazon’s 2018 wage increase from $11/hour to $15/hour resulted in an average local unskilled low-wage increase of 4.7% suggesting those local markets didn’t need to meet Amazon’s wages in order to compete with them. The $15 is enough to lure some people to work at Amazon but it seems there are others for which slightly lower pay and the benefit of bathroom breaks is a trade-off they’re willing to make in the labor market. [1]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3793677 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3793677

kube-system 5y ago
Of course. How else do you entice literally hundreds of thousands of people to apply for a job? They’ve hired somewhere around a million employees in the past 5 years. > The $15 is enough to lure some people to work at Amazon but it seems there are others for which slightly lower pay and the benefit of bathroom breaks I know a couple of people who work at an Amazon warehouse, and I’ve asked them about this, and they said it’s never been an issue.
- deleted 5y ago
  [deleted]
- toast0 5y ago
  I think bathroom breaks in warehouses was an issue several years ago. When that got enough media attention, it seems to have stopped (at least mostly); but now that bathroom breaks for drivers is an issue, a lot of people are assuming it's the same thing, so it must have been going on the whole time. But while it's the same type of problem, it's not quite the same problem as before.

repsilat 5y ago

Is this "Baumol's Cost Disease"? Productivity goes up at Amazon, wages go up at Amazon, wages go up elsewhere so they can attract workers, and prices for consumers go up. Good marketing, but a bad outcome once you've read Bastiat -- jobs and wages are a cost.

lotsofpulp 5y ago
> Productivity goes up at Amazon, wages go up at Amazon, Productivity going up does not cause wages to go up. Lower supply of labor relative to demand or higher demand relative to supply causes wages to go up.
- repsilat 5y ago
  I don't think Amazon's decision to raise wages was pure microeconomic pressure. Single market participants don't need to get their policies out of a textbook, and textbook responses don't get as much news coverage. High productivity leads to better margins. Better margins allow Amazon to raise wages. Raising wages helped them hire in a competitive marketplace, sure, but it was also a political act. Amazon has been accused of mistreating workers, and paying them above the going rate defuses that accusation.
  - lotsofpulp 5y ago
    There may be a political aspect to it, but supply for warehouse type labor has been shrinking and demand was increasing for a decade, so they probably saw the writing on the wall and decided to kill 2 birds with one stone. But I do not think Amazon can afford to stay competitive with Target and Walmart and Home Depot and spend a material amount more on labor costs too. At least not without subsidizing the retail operations with margins from other areas of the business.
    - bombcar 5y ago
      I think it goes the other way - Target and Home Depot are beginning to leverage the fact that hey have warehouses across the country (their stores) - AND they provide quality control that Amazon seems unwilling to do. Which will be what sinks Amazon- becoming an fancy US storefront for Alibaba.

bryanrasmussen 5y ago

reminds me of Henry Ford's wage hike https://www.saturdayeveningpost.com/2014/01/ford-doubles-minimum-wage/ https://www.saturdayeveningpost.com/2014/01/ford-doubles-min...

elliekelly 5y ago
> According to an article (above) in the Post sponsored by the automaker Interesting! I had no idea submarining was happening a hundred years ago. I wonder how common it was. This was my favorite line though: > Ford employees would be “demoralized by this sudden affluence,” and, of course, Ford Motor Company would soon be bankrupt. Nothing hurts employee morale like a huge raise!
- bombcar 5y ago
  If anything it was more common - the term “yellow journalism” comes from that era. Most of what we are looking back is the stuff with value that survived.
- a1369209993 5y ago
  > > "demoralized by this sudden affluence," > Nothing hurts employee morale like a huge raise! That seems likely to be language drift, and indeed checking a contemporary-ish dictionary produces: demoralize 2 c : to throw into disorder morale 2 b : a sense of common purpose with respect to a group : espirit de corps which sounds like a much less stupid concern.

pkilgore 5y ago

Why are we linking to the press release instead of the paper?

deleted 5y ago
[deleted]

kaliali 5y ago

While it is true that Amazon raised their wages to at least $15/hr, they also cut healthcare, benefits, and other things their employees were receiving. Why Amazon is Begging For Regulations: The Twisted Economics of Amazon https://www.youtube.com/watch?v=KPGZgujnVek https://www.youtube.com/watch?v=KPGZgujnVek

miguelazo 5y ago

Of course, no mention that Bernie Sanders had to drag Amazon kicking and screaming to raise their minimum wage to $15. Glad they finally see the benefits...

missedthecue 5y ago
Kicking and screaming? Do you have any evidence of this? Amazon led the pack. Target, Chipotle, and others have followed.
- miguelazo 5y ago
  If you don’t keep up with an issue, maybe try Googling before making a comment like that. Amazon’s position could most generously be described as “defensive” during the months-long feud with Sanders that led to the increase. https://www.businessinsider.com/bernie-sanders-amazon-worker-pay-safety-conditions-2018-8 https://www.businessinsider.com/bernie-sanders-amazon-worker...

nautilus12 5y ago

Amazons warehouse wage no longer holding back the market for non Amazon workers. FTFY

StandardFuture 5y ago

A negative article about Walmart and a positive article about Amazon on the HN front page at the same time? There is NO WAY this could ever be PR firm coordinated ... NO WAY. I would NEVER break HN rules and EVER imply such a thing. I follow the rules.

anti-nazi 5y ago

time for a living wage across the board. if you can't afford to pay your employees a living wage you do not deserve employees

synaesthesisx 5y ago

$15/hour is not a living wage in the US. That is absolutely ridiculous. Amazon should double it for their warehouse workers (they certainly can afford to!).

hnarn 5y ago
Surely that depends on where in the US you live. It's about $2,400 a month which is by no means categorically impossible to live on in any part of the US.

TedShiller 5y ago

It’s called inflation

slim 5y ago

This is maybe in reaction to the "make amazon pay" global day of action from last week https://mobile.twitter.com/hashtag/MakeAmazonPay https://mobile.twitter.com/hashtag/MakeAmazonPay

varispeed 5y ago

This isn't right. If workers have to apply for any benefits, because they cannot live off what they get paid, it means other tax payers subsidise their wages, but Amazon keeps the profits (then fakes losses and avoid tax). They are essentially stealing from everyone.

joshu 5y ago

https://en.m.wikipedia.org/wiki/Baumol's_cost_disease https://en.m.wikipedia.org/wiki/Baumol's_cost_disease