Editor’s note: This commentary is by Tom Evslin, an entrepreneur, author and former Douglas administration official. This post first appeared on his blog, Fractals of Change.
[I]t’s great news that Amazon wants to raise its own minimum wage to $15/hour. Shows the economy is growing and workers are more in demand. Companies that compete with Amazon for workers will also end up paying more. Great, even though we will also pay a greater retail markup for goods.
It’s terrible news that, in the company’s own words, “Amazon’s public policy team will be advocating for an increase in the federal minimum wage.”
Suppose you’re a local retailer in, say, Vermont and you’re only paying $12/hour to your workers. You don’t have the option of massive automation that Amazon has. But you and your workers might be able to compete with Amazon for some products because your cost of labor is lower. If Amazon has its way, that will be against the law. You must pay what they pay even if it drives you out of business.
Amazon has been investing heavily in automation. There’s nothing wrong with such an investment, but it does tend to eliminate the need for the least skilled (lowest paid) workers. Obviously robots picking inventory is not something that would help a mom and pop neighborhood store even if mom and pop could afford a robot; so mom and pop still need the less-skilled workers that Amazon doesn’t need. It’s deplorable that the retail giant wants to use government to make sure no one compete with them, not even mom and pop.
Let’s look at this from a worker’s point of view. Suppose there is no Amazon warehouse in your state or suppose that you don’t meet Amazon’s qualifications for one of their sought-after jobs. Can you take a job at $14/hour while you build your skills? Not if Amazon has its way with Congress. If you don’t qualify for a $15/hour job, you get no job at all.
There couldn’t be a better example of a giant corporation trying to use government to snuff out competition. Bernie Sanders loves what Amazon is doing. To be charitable, he doesn’t understand the effect on small competitors or workers Amazon doesn’t hire. What do you think the editorial policy of The Washington Post, which Amazon founder Jeff Bezos owns, will be on this issue? Bezos by some accounts is the world’s richest man. I think he got there through brilliance and hard work (and the luck which is always needed for success). The last thing Bezos needs or deserves, however, is government help against competition.
