The reality of minimum wage hikes: Amazon example

Posted by $ blarman 1 year, 3 months ago to Business
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Gotta love how reality works: you have to be able to pay for a wage increase. These workers aren't providing any more bang for the buck they are getting, so you just take away their bonus check in exchange for a slightly higher hourly wage. It's brilliant on the part of Amazon - if entirely disingenuous since they are doing it to promote themselves as a worker-friendly company.

What I want to see is a follow-up in a year of how many mid- and upper-level managers quit as a result of no longer being eligible for bonuses.

This also reminds me of the same tactics taken by HP after Lou Platt took over. In the early 90's, they were still paying quarterly profit-sharing checks to every employee in the company down to the janitors. (My dad worked for HP and we had a good friend who worked as a janitor before he went back to school.) Then they changed their policies. Profit sharing was restricted to the managers - not the line employees. Then HP products were no longer available to HP employees at cost. Then came some ridiculous and draconian policies about office supplies. Next they cut back on the annual division picnics. Then another wage change where only senior level VP's were eligible for profit-sharing bonuses.

And now you have a company (HP) that has lost its edge and is now nothing more than a producer of consumer electronics. I wonder if anyone will look back in 20 years at Amazon and point to this as the first in a long string of dominoes...

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  • Posted by CircuitGuy 1 year, 3 months ago
    I have not studied the Amazon move, but the first thing that comes to mind is I wonder if Amazon's business needs cause them to hire mostly people well above minimum wage. A lot of min wage jobs are in retail. But maybe because of their reliance on automated warehouses and other factors, Amazon pays people more. I have read they pay better than min wage for manual labor and expect people to keep rigid timetables in their interactions with machines that follow rigid timing. Workers say it's a good opportunity but not something to make a long-term career at.

    Anyway, if all that's true, then Amazon calling for a minimum wage is effectively calling for a tax on their competitors. In this possible scenario, Amazon's business model doesn't require a lot of min wage work, but its competitors' do. This allows them to get the gov't to penalize their competitors and look good while doing it.
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