They did the exact same thing with sales taxes for online purchases: When they were up-and-coming they fought it. Once they had warehouses in the states where most of their business comes from, they supported legislation to force online sales tax since they had to do it already anyway.
Like others said though, at least this move will benefit workers.
Let’s also not forget that while Repubs have traditionally been pro business, Dems, since the 80s have also got cozy with business and get humongous donations from corps —something which was not the case pre 1980s.
> Let’s also not forget that while Repubs have traditionally been pro business, Dems, since the 80s have also got cozy with business and get humongous donations from corps —something which was not the case pre 1980s.
I don't intend to engage on "x is better than y." or whataboutism comparing political parties. It is simply a valid observation that republicans are more likely to be against raising the minimum wage, so it would follow that if Amazon is only doing this in the hopes that the government will raise it anyway and other companies would have to pay more, it would be an absurd risk to take.
Higher compensation is done out of the desire to attract and retain better workers.
If Amazon started paying unemployed people or giving them gift cards to buy things on Amazon, then it would be charity.
Is this cynical, or good move on the part of Amazon? A little of both. It is a smart long-term profit move for Amazon. But I would also say that overall would be great to spark a trend where companies compete via both smart capital investments to raise productivity, and being willing the share the benefit of rising productivity to employees as a tool against competitors.
Middlebrow dismissals are a hacker news staple.
http://www.byrnehobart.com/blog/why-are-middlebrow-dismissal...
My guess is that from Amazon's point of view, they are winning political points by not just raising their own minimum wage to $15, they are also using their standing in the industry to increase quality of life for non-Amazon minimum wage workers. If they succeed, I am happy to grant them the credit they are due.
If a big corporation doing the right thing results in more profits for them, I don't see that as grounds for criticism. Did we criticize Starbucks when they offered a competitive wage and free college education? Or any of the other companies that chose to pay above the minimum?
Remember that the velocity of money makes it a non-zero-sum game.
EDIT: Ends up that Wikipedia covers this nicely:
https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...
"The interconnection of price levels, central bank policy, wage agreements, and total aggregate demand creates a situation in which conclusions drawn from macroeconomic analysis are highly influenced by the underlying assumptions of the interpreter."
Also has a nice side-bar quote from Henry Ford, who was partially known for higher wages, and which I think addresses the point I was trying to make (emphasis mine):
"The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One's own employees ought to be one's own best customers."
Worst case for Amazon is they maintain status quo by forcing competitors cost up. Best case for Amazon is that they drive some of their competition out of business, or take some of that business because super giant Amazon is better able to absorb the increased wage cost than smaller businesses.
It is very much like their state sales tax collection strategy. Oppose it for as long as possible, accept it, then lobby for everyone else to have to do it.
There's no doubt labour is better of in the short run with double wages. I would not doubt the effects in the long-run but that's part belief. The market structure will change, less capital intensive firms will drop out. That might be brick and mortar stores (note: bricks are capital but bricks are not really productive in the sense meant above).
Want to give low wage people an actual pay raise? Cut federal payroll taxes since those affect workers equally as they are percentage based.
A $10 wage in Alabama is far more valuable than a $15 wage in Sunnyvale. And conversely, a $15 minimum in Alabama would be more catastrophic to a business than the same minimum in Seattle.
"For most firms, a threshold of $500,000 in annual dollar volume of business applies to be covered (i.e., the Act does not cover enterprises with less than this amount of business)."
I'd also argue that definition of "small shop" $500k threshold should change between California and Alabama.
Of course, if that's a significant general problem rather than a narrow edge case, the entire idea of market economics is a sad joke.
The argument that their relative competitive positions changes by first-moving on wages seems not in doubt? Obviously when the wages double for everyone the most capital intensive gain competitive power.
And CMIIW, I think increased minimum wage will increase goods price and higher skilled worker's wage overall, making those changes useless again.
It's just my 2 cents, with source limited from following recent news.
If they are doing it to look good that means they are doing because they value looking good in terms of ethics, if that is true then they are essentially acting in the right. They could have easily went to $9 or $10 to avoid government penalties.
It's easy to mistake cynicism for wisdom.
Because no matter how cynical or self interested, there's still the enlightened part. Doing the right thing for the wrong reasons is still doing the right thing, fwiw.
You really need to get out of your bubble.
A lot of us who understand economics genuinely think minimum wages hurt the poor, and think this can bring a lot of unemployment.
Skepticism of concentrated power is the ur-American political belief. We seem to have forgotten that lately.
Humans can be motivated by many things, profit and looking good included. I'm vaguely aware of a philosophical branch that postulates that all actions are selfish, but that ain't science and so I disagree. People will sacrifice their pyramid of needs towards s greater good, I've never heard of a company utterly scuttling profits over the greater good though.
On that note, in this case Amazon obviously is shedding profit for a greater good here, especially if they actually lobby, so in this case I believe they (particularly the people that made this decision) deserve praise.
(0)https://en.wikipedia.org/wiki/Vince_Coleman_%28train_dispatc...?
Reverse, Do you think that a company such as amazon should be paying their fulltime and part time employee a wage that requires government subsidies (that you and I pay for) to survive while enjoying the amount of revenue and profit they are receiving?
Yes, I do. I think most people misunderstand government subsidies when they make this argument. The idea that the company you work for is responsible for maintaining your standard of living is a weird one, that doesn't really come from any obvious moral principle. We, as a society, have decided that we don't want people to have a standard of living below a certain level. Therefore we, as a society, should provide the resources to ensure that that happens. If Amazon wants to come to those people and say "we'll give you $X/hour to do this task for us", and those people say "Yes", then I don't see any good reason for that to change the moral calculus of society at large, or for Amazon to suddenly become responsible for that person's general welfare.
On that basis, is the implication here that hearing anonymous and vague internet praise actually tips the utility calculus of the company in some way?
Because if not it's hard to know why anyone should praise them -- as opposed to acknowledging the decision, or silently mentally updating one's assessment, or not engaging with the news at all, or criticizing them for not doing more.
In aggregate, yes. You seem to be trying to reduce this to "who cares about silly comments on the internet", but of course, that isn't the point. The point is about where our moral sentiments ought lie, collectively. And yes, the rollup of all the individuals making throwaway comments on the internet actually do synthesize much of our collective worldview. So yes, I do think that anonymous and vague internet praise actually tips the utility calculus of all companies. If you don't, then you haven't been paying much attention for the last decade.
Motives matter.
They're obviously caving into pressure - from unions, social activists and Bernie Sanders.
>especially if they actually lobby
Which they'll do especially because they don't want to be put at a competitive disadvantage by companies who pay minimum wage.
You could say that and you would be right. Why should anyone praise you if your underlying motivations are self-centered? You seem to be asserting that this is fundamental human nature, however, which is a belief which has been refuted plenty of times throughout history.
You had as an unstated axiom that self-interested action are not praiseworthy. You still have not made an argument for that, though you have pointed out that a world composed only of self-interested action would be an unpleasant one (I agree).
However, using a more realistic understanding, where actions come from a multitude of motivations, why do you consider a given action's being self-interested to exclude it from praiseworthiness?
That's not actually true.. it's a caricatured straw-man argument, usually employed by people who want to attack Capitalism in the general sense.
Of course companies have to make a profit to survive; but not all companies ruthlessly optimize every single variable to squeeze out the last $0.0000001 of profit, regardless of the side effects. At the end of the day companies are made up of people, and even if big-shot CEO's tend to have more pyschopathic tendencies than average, they're still human beings. And they usually answer to boards, and are advised by other managers, who are also human beings.
Not saying all companies are noble, virtuous, and pure or anything. But hyperbole in the other direction is just as inaccurate.
I agree with you, though. The idea that companies have to be like zombies, mindlessly shambling toward revenue, is false. If a company acts that way, it was a choice on somebody's part, not an immutable law of nature. If somebody in charge decides they want it to act differently, they have that option too.
To say corporations are all bad all the time is bullshit. Likewise to say corporations are all good all the time is also bullshit. Like everything, there are pros and cons. Overall I think our capitalist economy does more good than bad. If it didn't, none of us would be able to be having this debate because we would be too worried about the next meal.
Clean water access? Paid for my government. Cheap and healthy food? Government subsidies. Energy? Government funds majority of research. Infrastructure was mostly inlaid by Government implemented New Deal/other job creation programs.
Corporations had little to no involvement in 'doing the work' here. Access to cheap/healthy food was before corporations were the majority of agriculture due to government subsidy. Energy is largely built on research which is largely funded by the government. The majority of interstate groundwork as it's been laid out today was started by the government's roadbuilding job-creation programs.
While large legal entities may have their benefits, one shouldn't subscribe undue merit to them in the pursuit of attempting to dissuade undue chagrin.
There is no such thing as altruism: everyone has their agenda.
FFS -- it was shaming of amazon's pay rate for their employees that caused the change in behavior in the first place.
I think it is rational to look at what and why actions were taken. Do you believe that the raise of the minimum wage at Amazon was out of good nature? Was it a decision to mitigate brand perception costs against labor costs after a bunch of national stories reported that they were paying so little in markets that their workers were forced to also take government subsidies while they have had their most profitable quarters ever? As far as the push to get the minimum wage raised -- is it not a reasonable view that it is in amazons best interest to further reduce the reoccurring labor costs effectively by ensuring their competitors are also forced to match their labor cost?
The bottom line is if Amazon (or any company for that matter) wants to treat their employees better than the minimum wage -- they were and still are able to do so. Amazon happened to be in a state where because of the publicity pressure (showing their full time employees unable to live on their wage) it was more cost effective to make a change than not.
Does it matter what the rationale was? I know if I was an Amazon minimum wage employee I could care less what the rationale was. I'd just be thrilled to be getting a pay raise. Where I live the minimum wage is only $11.25/hour. Getting a bump to $15 will be a big deal for those people.
If you're Amazon, yes, it matters a ridiculous amount.
The last thing you'll want is for people to realize that the union drives actually worked. That would mean more union drives and more pay rises on the horizon. Can't have that!
Count the number of mentions of the reason for their decision in their press releases:
https://press.aboutamazon.com/news-releases/news-release-det...
He wanted people to have free time so they could appreciate the stuff they buy. Capitalism at its finest.
Which is why a tory chancellor wanted a higher minimum wage - to cut the social security bill
For publicly traded companies, there is: https://www.litigationandtrial.com/2010/09/articles/series/s...
> Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form. Those standards include acting to promote the value of the corporation for the benefit of its stockholders.
"Value" yes, but again says nothing about "profit". The court acknowledged different stockholders can and do have different and even conflicting definitions for value, and that a contract (not a law) should be used to resolve those differences. In the end the only thing that the judge ruled against were actions specifically designed to destroy the value of the company's stock by making it harder to buy and sell. He didn't order e.g. that Craigslist raise ad prices even though it's widely believed they hold a ton of pricing power and are deliberately avoiding maximizing profit because they prioritize community.
I am not nit-picking, asking in good faith: is that enacted into a law ? Or is that part of a contract between shareholders and the board of executives ?
I have heard about that walmart competitor run like a family business and that gives every employees a voice (a cooperative ?).
according to this ny times article [2] it states:
`There is a common belief that corporate directors have a legal duty to maximize corporate profits and “shareholder value” — even if this means skirting ethical rules, damaging the environment or harming employees. But this belief is utterly false. To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”`
the ny times article also cites some sources such as supreme court case; it’s well worth a read
[1] https://www.sandiegobusinesslawyerblog.com/fiduciary-duties-...
[2] https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
It is true that companies are not required to "pursue profit at the expense of everything else".
But it is also true that companies are held to legal standards that "include acting to promote the value of the corporation for the benefit of its stockholders" (Ebay v Newmark). This was famously weaponized against Craigslist several years ago, who were successfully sued over their refusal to let shareholders change corporate culture.
That certainly bucks the trend and is praiseworthy.
https://www.theverge.com/2018/10/3/17934194/amazon-minimum-w...
Was our skepticism perhaps reasonable?
Amazon (and all companies) spend most of their time/resources figuring out how to make more money and gain more power; I think it's appropriate that we as consumers, in turn, spend our time demanding more of them in terms of both value delivered and net benefit to society.
I don’t think Amazon deserves much sympathy. They're one of the most powerful companies in the world, have made a small group of people very rich while continuing to treat employees poorly. It's great that they're making this move but I don’t think we as consumers/citizens should be merely satisfied with it.
If good behavior isn't rewarded, how do you think companies might act in the future.
People, as well as companies, respond to incentives.
Cynicism is lazy. And generally, it has the effect of disheartening anyone from even trying to do the right thing. That people are cynical is of course understandable, but it's nothing to strive for.
The top comment is the most popular one.
There are also benefits to paying more salary than your competitors (no hiring shortages, best employees, low turnover, etc), so I'm not going to blindly accept that it's now in Amazon's interest to drag the rest of the industry along with them.
But even if I did, there's absolutely no guarantee that this kind of lobbying would ever work. And if it did, it could be decades from now, $0.50, or both. In the meantime, Amazon has already put their money where their lobby is.