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This argument sounds entirely theoretical. Do you have an example of even one small town where average or median wages or benefits were decreased as a result of

This argument sounds entirely theoretical. Do you have an example of even one small town where average or median wages or benefits were decreased as a result of Amazon? I frequently encounter armchair economists on the Internet making sweeping claims about various, but it is frustrating. It takes basically no effort to think up something plausible. But to take even the first step towards empirically verifying a given hypothesis is an enormous amount of work. Without even a rough empirical foundation, how valuable are these armchair theories? A little dated now but the Economist had a little mini-article about Amazon and wages. Really highlights how difficult it is to draw any definitive causal links, as well as trade offs (like benefits and unemployment): https://www.economist.com/united-states/2018/01/20/what-amazon-does-to-wages https://www.economist.com/united-states/2018/01/20/what-amaz...

jfim 5y ago
> Do you have an example of even one small town where average or median wages or benefits were decreased as a result of Amazon? A couple of quotes from https://www.nytimes.com/2021/03/18/business/economy/amazon-wages-alabama-union.html https://www.nytimes.com/2021/03/18/business/economy/amazon-w... In making the case against a union at its warehouse in Bessemer, Ala., Amazon has touted its compensation package. The company notes that base pay at the facility, around $15.50 an hour for most rank-and-file workers, is more than twice the local minimum wage, and that it offers comprehensive health insurance and retirement benefits. But to many of Amazon’s Bessemer employees, who are voting this month on whether to unionize, the claims to generosity can ring hollow alongside the demands of the job and local wage rates. The most recent figure for the median wage in greater Birmingham, a metropolitan area of roughly one million people that includes Bessemer, was nearly $3 above Amazon’s pay there, according to the Bureau of Labor Statistics. But other workers emphasize that pay at Amazon isn’t particularly high for the Birmingham area, even if the pandemic has reduced their job options. The retail workers’ union said it represented employees at nearby warehouses where pay is $18 to $21 an hour, including an ice cream facility and a grocery warehouse not far from Amazon.
- jaredklewis 5y ago
  I think these are interesting points (though a union in a standoff with Amazon isn't a great source for information), but I don't find them very convincing For example, it is not surprising that amazon warehouse workers, an unskilled job with minimal required training, make less than a median wage. For example, the average salary of a warehouse worker in Los Angeles (where I live) is $38k/year. The average salary of a paralegal is $45k/year. This is unsurprising. I am not saying that warehouse work is easier than paralegal work, but I am saying that this phenomenon has nothing to do with Amazon. Further, it is worth noting that Amazon Warehouse jobs are unlike most many other warehouse jobs. Being able to use a pallet jack or forklift is a skill and that workers with those skills can command higher wages than workers without those skills is again unsurprising. I think it is hard to objectively analyze the situation by taking talking points from a union in a confrontation with Amazon. $18-$21 with what kind of benefits? For what kind of labor?
- 8note 5y ago
  Important to note: the vote result was already tallied to not unionize
gimmeThaBeet 5y ago
bloomberg had an article along similar lines late last year. The main hypothesis isn't terribly controversial to me, amazon lowers logistics wages since it pays less than the traditional players, and has sort of the 'business gravity' to immediate move in and be a significant employer. I would not call that suppressing wages on its own. Amazon's argument is that they aren't driving wages down, they are raising them up because their employees are not from traditional logistics, but most retail and service jobs, again, on its own, probably more right than not. That's the thing I think is hard to separate, and I want to know more about. These industries feel threatened by amazon, so where is that coming from? Is it all just business muscle and monopsony, or is there genuine disruption (even in something that relies on amazon's scale)? Sort of a competitively 'legitimate' advantage. And I would say that you can definitely discuss if they are externalizing societal costs with how they treat employees. It's not a direct comparison, but I think about the crafts that were overtaken by factories. I think it can't be that simple, but amazon clearly changed the labor dynamics, so what did it do and how did it do it? https://www.bloomberg.com/news/features/2020-12-17/amazon-amzn-job-pay-rate-leaves-some-warehouse-employees-homeless https://www.bloomberg.com/news/features/2020-12-17/amazon-am...
- jaredklewis 5y ago
  Yea, if the argument is that amazon drives wages lower because Amazon took a skilled job (forklift operator) and turned it into an unskilled job anyone can do, then I agree with that premise. I just think it is misleading to call that wage suppression as that is not how the term is traditionally used. Operating a loom probably does take less skill than knitting fabric by hand, but that's not wage suppression; that's just creative destruction. With that definition of wage suppression, pretty much every app, piece of software, or other innovation is suppressing wages.
  - judge2020 5y ago
    > forklift operator I get where you're coming from (there are other logistics-related specialty jobs), but i've heard that Amazon designs their warehouses around not needing forklifts (except in very few areas0 since they're incredibly dangerous in general.

jfim 5y ago

> Do you have an example of even one small town where average or median wages or benefits were decreased as a result of Amazon? A couple of quotes from https://www.nytimes.com/2021/03/18/business/economy/amazon-wages-alabama-union.html https://www.nytimes.com/2021/03/18/business/economy/amazon-w... In making the case against a union at its warehouse in Bessemer, Ala., Amazon has touted its compensation package. The company notes that base pay at the facility, around $15.50 an hour for most rank-and-file workers, is more than twice the local minimum wage, and that it offers comprehensive health insurance and retirement benefits. But to many of Amazon’s Bessemer employees, who are voting this month on whether to unionize, the claims to generosity can ring hollow alongside the demands of the job and local wage rates. The most recent figure for the median wage in greater Birmingham, a metropolitan area of roughly one million people that includes Bessemer, was nearly $3 above Amazon’s pay there, according to the Bureau of Labor Statistics. But other workers emphasize that pay at Amazon isn’t particularly high for the Birmingham area, even if the pandemic has reduced their job options. The retail workers’ union said it represented employees at nearby warehouses where pay is $18 to $21 an hour, including an ice cream facility and a grocery warehouse not far from Amazon.

jaredklewis 5y ago
I think these are interesting points (though a union in a standoff with Amazon isn't a great source for information), but I don't find them very convincing For example, it is not surprising that amazon warehouse workers, an unskilled job with minimal required training, make less than a median wage. For example, the average salary of a warehouse worker in Los Angeles (where I live) is $38k/year. The average salary of a paralegal is $45k/year. This is unsurprising. I am not saying that warehouse work is easier than paralegal work, but I am saying that this phenomenon has nothing to do with Amazon. Further, it is worth noting that Amazon Warehouse jobs are unlike most many other warehouse jobs. Being able to use a pallet jack or forklift is a skill and that workers with those skills can command higher wages than workers without those skills is again unsurprising. I think it is hard to objectively analyze the situation by taking talking points from a union in a confrontation with Amazon. $18-$21 with what kind of benefits? For what kind of labor?
8note 5y ago
Important to note: the vote result was already tallied to not unionize

gimmeThaBeet 5y ago

bloomberg had an article along similar lines late last year. The main hypothesis isn't terribly controversial to me, amazon lowers logistics wages since it pays less than the traditional players, and has sort of the 'business gravity' to immediate move in and be a significant employer. I would not call that suppressing wages on its own. Amazon's argument is that they aren't driving wages down, they are raising them up because their employees are not from traditional logistics, but most retail and service jobs, again, on its own, probably more right than not. That's the thing I think is hard to separate, and I want to know more about. These industries feel threatened by amazon, so where is that coming from? Is it all just business muscle and monopsony, or is there genuine disruption (even in something that relies on amazon's scale)? Sort of a competitively 'legitimate' advantage. And I would say that you can definitely discuss if they are externalizing societal costs with how they treat employees. It's not a direct comparison, but I think about the crafts that were overtaken by factories. I think it can't be that simple, but amazon clearly changed the labor dynamics, so what did it do and how did it do it? https://www.bloomberg.com/news/features/2020-12-17/amazon-amzn-job-pay-rate-leaves-some-warehouse-employees-homeless https://www.bloomberg.com/news/features/2020-12-17/amazon-am...

jaredklewis 5y ago
Yea, if the argument is that amazon drives wages lower because Amazon took a skilled job (forklift operator) and turned it into an unskilled job anyone can do, then I agree with that premise. I just think it is misleading to call that wage suppression as that is not how the term is traditionally used. Operating a loom probably does take less skill than knitting fabric by hand, but that's not wage suppression; that's just creative destruction. With that definition of wage suppression, pretty much every app, piece of software, or other innovation is suppressing wages.
- judge2020 5y ago
  > forklift operator I get where you're coming from (there are other logistics-related specialty jobs), but i've heard that Amazon designs their warehouses around not needing forklifts (except in very few areas0 since they're incredibly dangerous in general.