“We listened to our critics, thought hard about what we wanted to do and decided we want to lead,” Amazon CEO Jeff Bezos said in a statement announcing that the company would now be raising their company-wide minimum wage to $15 an hour for all employees.
Amazon is now lobbying for a national minimum wage of $15 an hour. This is far from a simple public relations move. A $15 minimum wage would have large consequences in the market, which Amazon may be trying to exploit.
A central argument in the importance of a minimum wage is the moral necessity of providing for those who work. “A lot of people are being paid minimum wage in their first job, and a lot of people moving out of their parent’s house can’t live on that,” Charles Leen, ‘24, said.
But beyond basic morals, many proponents of a higher national minimum wage believe that it serves as a very effective wealth redistribution tool. One supporter is Nobel Prize winning economist Paul Krugman. “There’s just no evidence that raising the minimum wage costs jobs,” Krugman said in a New York Times editorial written on July 17, 2015, on a national increase to the minimum wage.
This is a sentiment that rings true with students who promote a higher minimum wage. “It’s a counterexample to people who say minimum wage shouldn’t be raised, and people who think doubling the minimum wage would cause inflation,” Stephen Boerger, ‘22, said on the Amazon wage change.
However, many economists believe there is reason to be wary of raising the minimum wage, specifically in the effect it can have on workers. A study by researchers at Washington University found that, after Seattle raised its minimum wage, total amount of income earned by those at the bottom of the pay grade may have actually decreased, due to a decrease in hours.
There is also a concern that raising the minimum wage would have an adverse effect on prices, increasing the costs of everyday goods.
However, this isn’t much of a concern among proponents of a living wage. “If I can spend $3 more on everything I buy, and a bunch more people got paid more, that would be a good thing,” Boerger said.
However, many speculate that Amazon is lobbying for a higher national minimum wage to drive out competition. While Amazon inhabits an online space, most of its direct competition is from department stores such as Walmart and Target. Although these companies have been raising their minimum pay over the last few years, in some cases a $15 minimum wage could increase their labor costs by 33 percent.
But this market dominance is seen as a
positive in the eyes of some. “I’m more willing to pay for Amazon Prime because I know I’m helping someone and it’s something I want, so it’s a symbiotic relationship,” Leen said.
As Amazon moves more toward automation, they are poised to consolidate even more of the shopping market. Despite all of the uncertainties surrounding Amazon’s future moves, one thing remains certain: in this volatile situation, every development is worth keeping an eye on.