From the CNBC article: https://www.cnbc.com/2018/10/02/amazon-raises-minimum-wage-t...
• £8.20 per hour (days) to £10.16 per hour (nights). Rising to £10.50 per hour (days) to £12.46 per hour (nights) from November 1st 2018.
• Overtime rates between £12.30 per hour and £16.40 per hour. Rising to £15.75 per hour to £21.00 per hour from November 1st 2018.
https://www.reddit.com/r/news/comments/9kpeal/amazon_raises_...
Let's assume this raise will affect 250k workers this coming holiday season, bumping their pay from $12 to $15 (+$3).
Over 12 weeks at 40h/week, this represents an additional $360M in labor cost.
Using AMZN's 2017 revenue of 177.9B, this equates to 17.7 revenue-hours.
They aren't. They're comparing to revenue per hour. It doesn't matter what period of time you calculate revenue per hour with, you always get the same number.
The overall goal of these lazy estimates is to understand how significant a cost this is for a company like Amazon. Could activists have hoped for more? Are other companies, for whom the costs would be felt quite differently, likely to offer something similar?
In any case, it's not clear that revenue hours is a meaningful comparison anyway because it ignores how much of their cost is labor vs anything else.
Amazon's 2017 financials showed a final net income of $3 billion. They do reinvest aggressively in their company so a fair chunk of their costs are going to be 'voluntary', but that voluntary expenditure is the very action creating all these jobs. In any case, this is going to be a very substantial cost to them.
If so, why didn’t the employees change jobs?
If not, why is so much criticism directed at Amazon specifically, rather than at capitalism itself?
If you specifically target a few of the more infamous culprits, by getting them to adjust you can establish a precedent and build from there. This move probably isn't going to win Bezos any new fans, but there'll probably be a reshift of focus towards some of the similarly bad employers.
https://en.wikipedia.org/wiki/List_of_Amazon_locations#Fulfi...
Not with the 2nd highest turnover of all Fortune 500's.
https://www.ibtimes.com/amazoncom-has-second-highest-employe...
Like he said, Amazon has it's issues but the employees were free to quit and work at other similar positions in similar companies.
Source: https://corporate.target.com/article/2017/09/minimum-hourly-...
If you think that's true, you've never been an under-educated person living in a small town.
People criticize Amazon and Walmart more than other companies because Amazon and Walmart are bigger than those other companies. That seems like an entirely fair reason for them to get more attention.
But that's the point, isn't it? They put the warehouse there because it's where the cheap labor is. If you shame them into not paying less than $15/hour then the next warehouse they open might as well be in a place where $15/hour is the prevailing wage, or it was $14.75 with low unemployment and their presence only bumps it up to $15, meanwhile everyone in the small town they originally would have built in goes to the unemployment line.
The result is that good times correlate with more labor laws, but the causation goes the other way.
For example, social security pays benefits based on past income rather than a fixed or need-based payment, and the social security tax is a flat rate with an income cap, making it one of the most regressive taxes short of a poll tax. Meanwhile the amount of political corruption and mafia involvement in labor unions in the era of the Wagner Act makes it highly suspicious that their original purpose or effect was actually labor protection.
And to the extent that there were new actual labor laws, they were often largely symbolic or ineffectual. For example, the original federal minimum wage only applied to jobs in interstate commerce, which at the time actually meant interstate commerce. By contrast, many of the actually-meaningful state-level minimum wage laws were passed during the boom times in the 1920s.
Most of the meaningful labor and safety regulations we have came out of the economically prosperous period of the 1950s and 60s, e.g. that's when the federal minimum wage was extended to other workers, and then extended further in the economically prosperous period in the 1990s.
I'm not sure your hypothesis fits reality
Affordable Care Act (and subsequent non-repeal), disclosure requirements for executive pay ratios, very long list of state-level measures (which is where most of this actually happens in general).
This is just 2018: https://www.littler.com/publication-press/publication/ready-...
The current era is also a bit odd because Wall St. and a handful of megacities are booming but real wages in general haven't risen much, the rust belt is still falling apart, suffering from the opioid epidemic, etc. So it's not that surprising to see lots of new labor laws in places like California while other places are more worried about saving local businesses.
> Just recently the Supreme Court ruled that forced arbitration was legal and we are at some of the highest profits and productivity ever.
There are always counterexamples, and that one is from the courts rather than the legislature.
> Those protections weren't going up during the boom cycles in the 90s either.
Arbitrary sample of state-level changes (1990 and 1998), BLS has the whole set if you're interested:
Hell, I gave less than two weeks notice at my last job and was privately approaches by multiple coworkers asking me if I was worried about the company black listing me. When we have companies lay off/fire people though, no one bats an eye at them being immediately walked out the door. Stating that labor rights have been going up just seems willfully ignorant based on the actual results in the economy
That's just assuming the causation goes the other way again. If the labor rules instead are pricing smaller businesses out of the market leading to business consolidation that gives capital more power over labor, you would expect just what we see.
It also doesn't make a lot of sense to expect a lot of labor laws to increase wages regardless. If you pass a law requiring maternity/paternity leave, that benefits the employee but raises costs for the employer who has to find and pay a temporary replacement. The expected result of that is to suppress wages rather than increase them -- the money has to come from somewhere and most businesses don't have huge margins.
That determines the region, not the town. Equalize the labor cost and the optimal location may move significantly, e.g. to border the city from a different side. It would tend to move it from an area with low labor costs to an area with higher labor costs (and therefore cost of living) but closer proximity to customers or transport infrastructure. And making 50% more in a town with double the cost of living is no raise.
In America at least, we do not have agreement.
I'm not sure, but I think most places are OK with bathroom breaks. I could be wrong, though.
If so, why didn't the employees change jobs? See, this is much more difficult. If the Amazon warehouse pays more than other jobs around - even if the pay is still low - it makes it much more difficult to leave the job. You still need food and electricity and so on. The same sort of thing happens if an employer pays less, yet offers things like decent, affordable health insurance (or health insurance at all). To leave a job simply because of working conditions is a position with a bit of leeway.
If not, why is so much criticism directed at Amazon specifically, rather than at capitalism itself?
It isn't directed only at Amazon, but large employers. I'm not sure why some of the anger isn't directed elsewhere, though. I'm not sure it is fully capitalism's fault, but more of lack of laws protecting folks from capitalism alongside adequate enforcement of those laws. It is easier, however, to direct anger at the company, who can change somewhat rapidly, rather than a government that is slow to act and rarely produces quality change for all.
So what you're saying is...it's capitalism's fault?
It is Ok to say that unrestrained capitalism is at fault, because that has led to this. Or capitalism that hasn't adjusted for the modern standards, perhaps.
Abuse is what is happening now, and the proper solution is laws to hinder such things. If it were up to me, a lot more places would be a socialist democracy with a thriving capitalistic sector.
Any concessions to this only come from fear that the bourgeoisie would lose further power, which explains why the rich historically supported the expansion of the middle class as it created a buffer between their interests and the interests of laborers, and would explain why Jeff Bezos would support a living wage now as without it there is an increased risk of having to make further concessions down the line.
Monosopy.
...why the downvotes?
If you live in such a place and Amazon is your employer, it may well be the case that you don't have a lot of other options, especially if what you came from was being on social assistance.
If they do their research, they'll realize they probably won't have a job for that long [1] and it would be preferable to stay in a position (that likely pays better with your examples) that is reliable.
[1] https://www.ibtimes.com/amazoncom-has-second-highest-employe...
https://trends.google.com/trends/explore?date=today%205-y&ge...
(Meijer is a regional chain. Sears is nearly out-of-business. Using them as examples would fall flat.)
What's the point of criticizing capitalism if there are no viable alternatives?
Even believing that it is the best of all systems we've thought of (which I do) does not preclude one from optimising its specifics.
The worst damage they and their ilk did was to convince the entire political spectrum from the centre-left to the far right that there is no alternative to free market fundamentalism.
I don't have a tried and tested alternative for you, but the idea that there are no alternatives is ludicrous to me.
We just need to be actually looking for these alternatives, which the corporate world has no interest in doing and the politicians in their pockets merely continue the theatrics of fixing a system that blatantly isn't working for anyone but the amassers of capital.
And before anyone loses their shit because I'm criticising the plutocracy we have allowed to be built in our names, nor I'm not a communist; no do I wish for a communist system.
I'm reminded of that comic with the cats on trial. Capitalism sucks in many ways, but it sucks a hell of a lot less than the alternatives we've tried. Same with democracy.
> Capitalism sucks in many ways, but it sucks a hell of a lot less than the alternatives we've tried. Same with democracy.
And that's fine, but I'm not so narrow-minded as to accept that there are no alternatives. History is replete with people patching up broken systems in futility; all because they could see no other way than the status quo.
That's because they treat their workers terrible. They're a huge company with a lot of profit and how people at the bottom of the chain are treated is maddening. They're seen as an example of how not to treat workers (and for good reason).
They definitely should not be lauded for this: They did some calculations and projections which showed that raising the minimum wage brings more benefits (PR stunt, not being the target of new legislation anymore, etc) than downsides (now having to pay X more to some people).
I refuse to believe Bezos woke up this morning with a new moral sense to change the ship around.
In 2016, they made a profit of $857 million on a revenue of $30.1 billion--- i.e. profit margin of 2%, compared to Alphabet's 9.7% or Facebook's 36%(!!!). It's the number that investors care about, because it tells them how likely they are to get money back out of a business when the invest money into it. It's also a number the company cares about, because it tells them how much of a shock to their fixed costs they could stomach without suddenly finding themselves spending more than they make to keep the doors open.
Amazon's (relatively) razor-thin margins are what make the company so paranoid about costs like wages and benefits; they've seen America's history of burning hulks of older companies wrecked by making pension promises when profits were high that they couldn't honor when profits tailed off.
Imagine if you are Amazon. Do you take the extra billion dollars you earned this month and throw it into another warehouse and more growth opportunities? Or do you keep your size the same and use that money to raise wages?
It's more of question of how they are allocating funds. Either way, the "profit" stays the same.
Amazon has been focused on growth at all costs, and that meant keeping wages razor slim and reinvesting every spare penny.
The real question is: Will slowing their growth investments and paying their employees a fair wage actually help their growth in the long run?
That's why you want inter-professional union.
Of course that system has been built over decades and the way it operates and negotiations are handled can vastly differ between neighboring countries (think France which is more confrontational at first and Germany where unions are more integrated into the process) (plus, unions have different political outlooks, so it's not one size fits all).
In countries with a strong social net unions use their affiliate's entrance fees to guarantee they are paid for striked days. Also some countries have laws that forbid employers to punish strikers (granted they announce in time they are going on a strike). Some sectors (medical, police, etc.) have some restrictions on that "right to strike".
That's just a really short resume, though and I don't know if such a thing could be possible in the USA.
They want a nice, clean work environment for their employees. So you need janitors.
Want to provide catered lunch? You need food service workers.
And the bar for "good enough" at those levels are much lower. You don't need a 5-star lunch every day. You need a decent lunch that's better than going out. And things can only get so clean.
Also, the parent's question was about Google.
https://ir.aboutamazon.com/news-releases/news-release-detail...
Employees (full-time and part-time; excludes contractors & temporary personnel): 575,700
As dang said, if you're going to make a big claim, at least attempt to be right.
Which, by the way, is (part of) why they’re so dominant.
https://infographic.statista.com/normal/chartoftheday_4298_a...
Net income doesn’t do that naturally or by accident.
Doing so while exploiting workers and dubious tax arrangements is not.
No, of course not, but it's a victory that the pressure on them was enough they felt they had to make a concession.
This may be true, but it doesn't nullify the fact that the workers are actually receiving a benefit from this, and it's a good thing that's worth pointing out.
I've went through a few articles on this but I didn't see any of them mention what Amazon's minimum actual pay was before this, just the federal minimum wage. Anybody know?