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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, a
by 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 agoThere 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 agoI 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.
- lotsofpulp 5y agoI agree Target and Home Depot are preferable since they do quality control and have in person warehouses everywhere. But they’re all competing for the same labor, hence the rising wages. But I do not think one can pay much extra than the others and stay competitive on the pricing for the same goods.
- bombcar 5y agoThe existing retailers have a chance of reducing costs by utilizing more out of city warehousing; whereas Amazon’s costs really have nowhere to go but up.