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> "There's a surplus of customer eager to pay the lowest possible price even if that means exploiting workers." This is just wrong. First, Amazon’s prices and

> "There's a surplus of customer eager to pay the lowest possible price even if that means exploiting workers." This is just wrong. First, Amazon’s prices and their wages for warehouse workers aren’t directly connected. If they were, amazon wouldn’t have posted 200B in profit in 2021. Given the 1.6mil employees, that’s $125k per employee of profit. Amazon could pay MUCH more, and still hold the same prices. Second, the hunger for cheap stuff is driven at least in part BY LOW WAGES. If you’re making minimum wage - you’re going to buy the cheapest things you can find. edit: i'm getting beat up in the comments because I used gross profits rather than $YOUR_FAV_PROFIT_METRIC I stand by using that number. If you think I am actually suggesting they distribute 100% of their profits to every employee you're straw-manning my point. I'm suggesting cutting a slice off profits, exec pay, and stock grants, and giving that to the lowest paid employees - since the company would not make that money without their labor.

sophacles 4y ago
It's simple, just apply modern capitalism. In this case the rule is: Ford was a genius for realizing his workers need to make enough to buy his product. Anyone else who makes that realization is a dirty commie.
- gruez 4y ago
  >Ford was a genius for realizing his workers need to make enough to buy his product In what world does it make sense to pay your workers $20k (or whatever), so they can spend $20k on products that your company makes? Factoring in margins you need each dollar paid to your workers to generate $6.66 dollars worth of sales for you for it to break even.
  - ipaddr 4y ago
    Cars are this big advertising moving billboard. Car companies employee thousands who work in cities built around these plants. Having employees driving around earning high paying wages spending it around town has a big influence on the rest of the town/region.
    - gruez 4y ago
      seems tenuous and hard to objectify. You could also use the same argument to say that raining $5 bills from your company offices has net positive value, eg. 1. dump a sack of $5 bills from your office 2. people associate your company with giving them free stuff, thereby giving you positive influence 3. ??? 4. profit
      - ipaddr 4y ago
        It can but each situation requires a multiplier. A $10,000 cash drop as a media story picked up nationally or regionally will be worth more. In Ford's case he doubled the daily pay to 5 dollars but this also provided a steady workforce so it had other benefits because a steady workforce means a trained and more productive workforce.
  - kps 4y ago
    > In what world does it make sense to pay your workers $20k (or whatever), so they can spend $20k on products that your company makes? A world where you're raising the floor so that everyone else's workers can also spend on the products your company makes.
    - gruez 4y ago
      ...except that won't happen because supply/demand drives prices, not the inflated wages that you're paying. Your competitors will continue to pay their workers the usual wages, and laugh all the way to the bank with the extra money that they're not spending on wages, or undercut your prices.
      - kennywinker 4y ago
        Supply and demand also applies to the labour market. If you pay more, the best people want to work for you and you can hire the best people. Humans are not fungible, no matter how much businesses try to treat them that way.
        gruez 4y ago
        >Supply and demand also applies to the labour market Right, but for wages (ie. prices) to go up, you need to decrease supply or increase demand. Increasing the prices you pay doesn't do that.
        kennywinker 4y ago
        Supply and demand can "solve" for the price for an HD TV. It can't solve the problem of "do I need an HD TV or a 4K TV?".
IMTDb 4y ago
A significant portion of Amazon profits comes from AWS. If you remove AWS from the equation, AWS does make money, but not the truckloads you are pointing. And AWS profits are in now way linked to amazon warehouse workers salaries. If Amazon increases wages - and thus prices - what do you think will happen: 1. People will still buy amazon because they have a higher wage so they ca afford it 2. People will buy more stuff from another store that provides cheaper prices while exploiting Chinese workers instead of American ones. Of course it's 2.
- kennywinker 4y ago
  Again, you’re simply wrong. https://www.shacknews.com/article/128660/amazon-amzn-aws-revenue-was-up-40-in-q4-2021-to-1778-billion https://www.shacknews.com/article/128660/amazon-amzn-aws-rev... 17.78B in 2021, or $11k per employee. That’s less than 10% of the per employee profit. Amazon can increase wages without raising prices.
  - lotsofpulp 4y ago
    The numbers you are using are wrong, and that article is sloppily written. Revenue and profit (net income) are not the same thing. Redo the math with the correct numbers: https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in... And note that Walmart/Target/Home Depot/ and all the other retail public companies have profit margins of low single digits. It is safe to assume Amazon has the same low single digit profit margins from its retail operations.
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oezi 4y ago
EBITDA is 60 bn from 470 bn revenue. Net income is 33 bn USD. They couldn't spend 125k per worker.
- kennywinker 4y ago
  Did i say they could "spend" that? No. I said: > that’s $125k per employee of profit And it is. Gross profit. I could use one of your numbers, $33B net income, or $60B EBITDA. But using those number accepts the premise that all of that money was allocated correctly, and it's just the 33B left over that is free to be distributed.
lotsofpulp 4y ago
AMZN did not have $200B profit in 2021. https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in...
- kennywinker 4y ago
  Amazon annual gross profit for 2021 was $197.478B, a 29.28% increase from 2020. https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-profit https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-...
  - lotsofpulp 4y ago
    There is no reason to ignore fixed costs (aka using “gross profit”) for the purpose of calculating how much extra cash a company could be paying its employees. Net income (aka profit) is the extra cash flow that could have been spent.
    - kennywinker 4y ago
      > Net income (aka profit) is the extra cash flow that could have been spent. It's possible gross profit is the wrong metric, but the premise that net income is the right metric isn't something I accept. Net income is the money left over after it's been allocated out as the company has chosen. i.e. all the salaries have been paid, stock grants have been made, buildings and utilities are all paid, stock buybacks have been allocated, etc If they allocated a little less to exec pay, and a little more to warehouse worker pay, I don't even think they'd need to cut into the 33B they have leftover. But EVEN if we accept the compensation amazon has and only allow ourselves to play with net income - 33B is STILL $20k per employee. Do you know how life-changing $5k/year is when you're making 29k/year? That still leaves 15K of profit per employee (or 25B) that can go to people who didn't work for it.
      - dh2022 4y ago
        Net income is all the money left after all the expenses are paid. Stock buybacks have no impact on net income (they are part of the cash flow statement, not the income statement). Excluding all the things you said to get to the metric you like means Amazon can function without executives, software developers (no stock grant expenses), warehouses (no buildings and utilities expenses).... Which is plainly not true.
sib 4y ago
No idea where you are getting your numbers, but Amazon did not post $200B in profit in 2021. The list of top five annual profit (adjusted to current USD) by any company ever is: 1. Saudi Aramco (2018) - $120B 2. Saudi Aramco (2021) - $115B 3. Vodafone (2014) - $113B 4. Fannie Mae (2013) - $98B 5. Apple (2021) - $95B Perhaps you are thinking about revenue?
- kennywinker 4y ago
  > Amazon annual gross profit for 2021 was $197.478B, a 29.28% increase from 2020. https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-profit https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-... Gross profits.
  - sib 4y ago
    Gross profit is not profit. And the comment said "profit" not gross profit.
  - dh2022 4y ago
    Hello Kenny - some clarification seems to be needed re: some financial metrics. 1. Gross profit = revenue - COGS 2. COGS = price paid to manufacturer + transportation costs from manufacturer to the warehouse and from warehouse to customer COGS does not include warehouse rent and utilities - these are operating expenses. Hopefully this makes it clear that my reply to your other comment was in good faith and not a straw man. The metric you proposed is not a good metric. Amazon cannot function if Gross profit is 0 --- because it would not be able to pay for the rest of the stuff it needs to function: executives, software developers, warehouses. Saying all the expenses not included in COGS are discretionary is just not true - some of theses expenses are essential.
cratermoon 4y ago
> Amazon’s prices and their wages for warehouse workers aren’t directly connected If you can say that, then you can say that Amazon’s prices and the taxes it pays on its revenues aren't directly connected.
- kennywinker 4y ago
  I would say that. Raise taxes on corporations. Trickle-down economics is and always has been a lie.
deleted 4y ago
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sophacles 4y ago

It's simple, just apply modern capitalism. In this case the rule is: Ford was a genius for realizing his workers need to make enough to buy his product. Anyone else who makes that realization is a dirty commie.

gruez 4y ago
>Ford was a genius for realizing his workers need to make enough to buy his product In what world does it make sense to pay your workers $20k (or whatever), so they can spend $20k on products that your company makes? Factoring in margins you need each dollar paid to your workers to generate $6.66 dollars worth of sales for you for it to break even.
- ipaddr 4y ago
  Cars are this big advertising moving billboard. Car companies employee thousands who work in cities built around these plants. Having employees driving around earning high paying wages spending it around town has a big influence on the rest of the town/region.
  - gruez 4y ago
    seems tenuous and hard to objectify. You could also use the same argument to say that raining $5 bills from your company offices has net positive value, eg. 1. dump a sack of $5 bills from your office 2. people associate your company with giving them free stuff, thereby giving you positive influence 3. ??? 4. profit
    - ipaddr 4y ago
      It can but each situation requires a multiplier. A $10,000 cash drop as a media story picked up nationally or regionally will be worth more. In Ford's case he doubled the daily pay to 5 dollars but this also provided a steady workforce so it had other benefits because a steady workforce means a trained and more productive workforce.
- kps 4y ago
  > In what world does it make sense to pay your workers $20k (or whatever), so they can spend $20k on products that your company makes? A world where you're raising the floor so that everyone else's workers can also spend on the products your company makes.
  - gruez 4y ago
    ...except that won't happen because supply/demand drives prices, not the inflated wages that you're paying. Your competitors will continue to pay their workers the usual wages, and laugh all the way to the bank with the extra money that they're not spending on wages, or undercut your prices.
    - kennywinker 4y ago
      Supply and demand also applies to the labour market. If you pay more, the best people want to work for you and you can hire the best people. Humans are not fungible, no matter how much businesses try to treat them that way.
      - gruez 4y ago
        >Supply and demand also applies to the labour market Right, but for wages (ie. prices) to go up, you need to decrease supply or increase demand. Increasing the prices you pay doesn't do that.
        kennywinker 4y ago
        Supply and demand can "solve" for the price for an HD TV. It can't solve the problem of "do I need an HD TV or a 4K TV?".

IMTDb 4y ago

A significant portion of Amazon profits comes from AWS. If you remove AWS from the equation, AWS does make money, but not the truckloads you are pointing. And AWS profits are in now way linked to amazon warehouse workers salaries. If Amazon increases wages - and thus prices - what do you think will happen: 1. People will still buy amazon because they have a higher wage so they ca afford it 2. People will buy more stuff from another store that provides cheaper prices while exploiting Chinese workers instead of American ones. Of course it's 2.

kennywinker 4y ago
Again, you’re simply wrong. https://www.shacknews.com/article/128660/amazon-amzn-aws-revenue-was-up-40-in-q4-2021-to-1778-billion https://www.shacknews.com/article/128660/amazon-amzn-aws-rev... 17.78B in 2021, or $11k per employee. That’s less than 10% of the per employee profit. Amazon can increase wages without raising prices.
- lotsofpulp 4y ago
  The numbers you are using are wrong, and that article is sloppily written. Revenue and profit (net income) are not the same thing. Redo the math with the correct numbers: https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in... And note that Walmart/Target/Home Depot/ and all the other retail public companies have profit margins of low single digits. It is safe to assume Amazon has the same low single digit profit margins from its retail operations.

deleted 4y ago

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oezi 4y ago

EBITDA is 60 bn from 470 bn revenue. Net income is 33 bn USD. They couldn't spend 125k per worker.

kennywinker 4y ago
Did i say they could "spend" that? No. I said: > that’s $125k per employee of profit And it is. Gross profit. I could use one of your numbers, $33B net income, or $60B EBITDA. But using those number accepts the premise that all of that money was allocated correctly, and it's just the 33B left over that is free to be distributed.

lotsofpulp 4y ago

AMZN did not have $200B profit in 2021. https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in...

kennywinker 4y ago
Amazon annual gross profit for 2021 was $197.478B, a 29.28% increase from 2020. https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-profit https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-...
- lotsofpulp 4y ago
  There is no reason to ignore fixed costs (aka using “gross profit”) for the purpose of calculating how much extra cash a company could be paying its employees. Net income (aka profit) is the extra cash flow that could have been spent.
  - kennywinker 4y ago
    > Net income (aka profit) is the extra cash flow that could have been spent. It's possible gross profit is the wrong metric, but the premise that net income is the right metric isn't something I accept. Net income is the money left over after it's been allocated out as the company has chosen. i.e. all the salaries have been paid, stock grants have been made, buildings and utilities are all paid, stock buybacks have been allocated, etc If they allocated a little less to exec pay, and a little more to warehouse worker pay, I don't even think they'd need to cut into the 33B they have leftover. But EVEN if we accept the compensation amazon has and only allow ourselves to play with net income - 33B is STILL $20k per employee. Do you know how life-changing $5k/year is when you're making 29k/year? That still leaves 15K of profit per employee (or 25B) that can go to people who didn't work for it.
    - dh2022 4y ago
      Net income is all the money left after all the expenses are paid. Stock buybacks have no impact on net income (they are part of the cash flow statement, not the income statement). Excluding all the things you said to get to the metric you like means Amazon can function without executives, software developers (no stock grant expenses), warehouses (no buildings and utilities expenses).... Which is plainly not true.

sib 4y ago

No idea where you are getting your numbers, but Amazon did not post $200B in profit in 2021. The list of top five annual profit (adjusted to current USD) by any company ever is: 1. Saudi Aramco (2018) - $120B 2. Saudi Aramco (2021) - $115B 3. Vodafone (2014) - $113B 4. Fannie Mae (2013) - $98B 5. Apple (2021) - $95B Perhaps you are thinking about revenue?

kennywinker 4y ago
> Amazon annual gross profit for 2021 was $197.478B, a 29.28% increase from 2020. https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-profit https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-... Gross profits.
- sib 4y ago
  Gross profit is not profit. And the comment said "profit" not gross profit.
- dh2022 4y ago
  Hello Kenny - some clarification seems to be needed re: some financial metrics. 1. Gross profit = revenue - COGS 2. COGS = price paid to manufacturer + transportation costs from manufacturer to the warehouse and from warehouse to customer COGS does not include warehouse rent and utilities - these are operating expenses. Hopefully this makes it clear that my reply to your other comment was in good faith and not a straw man. The metric you proposed is not a good metric. Amazon cannot function if Gross profit is 0 --- because it would not be able to pay for the rest of the stuff it needs to function: executives, software developers, warehouses. Saying all the expenses not included in COGS are discretionary is just not true - some of theses expenses are essential.

cratermoon 4y ago

> Amazon’s prices and their wages for warehouse workers aren’t directly connected If you can say that, then you can say that Amazon’s prices and the taxes it pays on its revenues aren't directly connected.

kennywinker 4y ago
I would say that. Raise taxes on corporations. Trickle-down economics is and always has been a lie.

deleted 4y ago

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