Understanding the Impact of Amazon’s Minimum Wage Raise

The decision by Amazon to raise its minimum wage is a complex issue that touches on labor market dynamics, union activities, and corporate strategies. While Amazon is a free-thinking organization, the raise in minimum wage is not just a choice based on internal policies; it is also a strategic move to compete for quality employees and stay ahead of unions.

Is Raising Minimum Wage A Necessity?

Raising the minimum wage within Amazon is not just a choice; it is a necessity. The quality of employees is often linked to the compensation they receive. For instance, a hamburger flipper at McDonald's earning three times the minimum wage now would earn $21.75, which is far above the current federal minimum. This shows that there is a natural pay scale that reflects market value and employee expectations.

From my own experience as a union carpenter, I've observed that companies often avoid lowering pay scales because employees who are valued and compensated fairly are unlikely to leave. Amazon's decision to raise its minimum wage can be seen as a preemptive measure to avoid unionization and maintain internal harmony.

The Non-Partisan Argument for Corporate Freedom

I support the idea that companies should make these decisions based on their internal needs and market dynamics, rather than external pressures. There is a significant concern about authoritarian governments imposing wage regulations for political gains. This can lead to a situation where smart elites take advantage of the system to the detriment of the broader workforce.

The idea that large corporations cannot succeed is a false narrative. Some argue that large corporations should maintain a low minimum wage to outcompete smaller firms, while others believe they should pay higher wages to dominate the market. Both perspectives have valid points but ignore the nuanced economic realities faced by businesses.

Economic Implications of Raise and Wage Barriers

Raising the minimum wage can have significant implications for both Amazon and its competitors. For Amazon, paying $15 per hour is a strategic move to retain top talent and stay competitive, especially in a sector where labor costs are a critical factor. However, forcing other companies to match this wage could be detrimental to small businesses with thinner profit margins. This is not about creating a fair wage; it’s about maintaining market competitiveness.

If Amazon is willing to pay $15 per hour, it is their business. Critics of such decisions often fail to consider the broader economic implications. Whether they are overpaying or underpaying is a question best left to the market. Unions might negotiate for higher wages, but it is ultimately a business decision that takes into account costs, labor dynamics, and competitive pressures.

Companies like Amazon should have the freedom to decide their own minimum wage, as external interference can lead to unintended consequences. The focus should be on creating a fair playing field through market-based solutions rather than government-mandated wage barriers.

Conclusion

The decision to raise the minimum wage is a multifaceted issue. It is not about fairness or morality but about strategic business decisions and internal labor market realities. While there are valid arguments on both sides, it is important to support corporate freedom and let the market determine wages. This approach ensures that businesses can operate efficiently while also addressing the needs of their employees and the broader economy.