Tuesday, October 2, 2018

Amazon Makes an Evil Move

Amazon today announced it is increasing its minimum wage to $15 for all full-time, part-time, temporary (including those hired by agencies), and seasonal employees across the U.S.—effective November 1. 

This is fine, Amazon should be able to play its employees whatever it wants.

But here is where they turn evil. In a press release announcing the wage hike, the company also states:

Amazon’s public policy team will also begin advocating for an increase in the federal minimum wage.
“We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, Senior Vice President of Amazon Global Corporate Affairs. “We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.
This, of course, flies in the face of free markets. If a wage is raised above market rates by government regulation, it will mean increased unemployment as those whose marginal revenue product is below the wage will be unemployable.

Amazon tends to demand statist measures whenever it will hamper competitors.



  1. Just a way to gain the PR benefits of raising wages and the added financial benefit of forcing their competitors to do the same.

  2. There are two things. One or both may be at play:

    1) Amazon executives knows it can't compete with other companies if it raises wages without forcing other companies to do the same.

    2) Amazon is ahead of most industries in automation, so the execs figure the minimum wage will hurt other companies in a disproportionate amount to Amazon's self-inflicted damage.

  3. This looks more like a bait and switch.

    Apparently, they are getting rid of their Restricted Stock Unit program which usually awards 2-3 shares of stock per year for workers that have 2 years of experience. (AMZN stock is worth almost $2000).
    Also, they are ending their Variable Compensation Pay (VCP) which provides monthly bonuses. An average worker usually receives $1,800 to $3,000 a year through the VCP program

    So for a lot of workers this will probably result in a net loss of several thousand dollars per year.

    And this is on top of the slap in the face to their best workers who have earned their current pay and now new workers are making about as much as they are.

    It is very likely, depending on how many of their workers benefited from these programs, this could be a net cost-saving measure for Amazon.